Category Archives: Periwinkle

Dialogue

12 November 2015

Tetraneuris,

           A weighty letter! Thank you for maintaining a dialogue. I apologize for my lack of writing recently. I will keep this response concise, T. Since I’ve known you – when your yellow buds were just starting to bloom high atop the mountain – you’ve had a sincere opinion that ‘what is local is often best’. You have never been a believer in centralization. I recall your sorrow when the last stop light was removed from the interstate system. I believe it was in Wallace, Idaho, along one of your old routes. Locke, Jefferson, Smith, and Hayek – each of these fellows thoughts have been entrenched in your mindset. Contra Mundum to a large degree your mantra. Some people feel the best route to a nation’s prosperity, a steadily rising per capita income, is through planning and collectivization. This is not your camp. You saw the recent financial crisis through a different lens. Firms and governments too large, protected and powerful. Governments swimming in debt due to planning schemes and wars. Excessive promises at all government levels in the form of pensions and benefits. Improper planning, rates of return too high, life expectancies not properly analyzed. Perhaps, Tetraneuris, an emphasis on banking at the local level would have averted much of the crisis. Securitization of loans is fine, but the buyers needed to do their own homework rather than relying on others, such as the rating agencies. Further, as you know, there are unfortunately interests which require large levels of financing to maintain hegemony. You are one who questions how a committee of planners is able to better allocate resources than the market itself. Which will result in greater national prosperity? Which will potentially slip into tyranny versus fostering individual freedom. There is much talk today about the disparity of income and wealth in society. The argument is being made that the answer to this is greater planning and regulation. Your (our, for I’m of course in your camp) argument is that were firms allowed to fail in the last debacle, the market would have cleared and great levels of wealth at the top end of society would have been destroyed. Things may have naturally become more evenly distributed. Smaller, well managed firms would have found new opportunities. The reality as well though is that individuals who had saved all of their lives would have watched their retirement plans and pensions evaporate. Jobs would have been scarce for a prolonged period. Perhaps political upheaval would have ensued. There is too much to discuss to make this clear and I did note this would be a brief letter… Not to mention I would be telling ‘Noah about the Flood’. Suffice it to say that you are unwavering in your conviction that federalization has its political and economic limitations. The two of us are today both concerned about government going further in the wrong economic and political direction. Planning and regulation run amok. By the way, speaking of planning (engineering), not only should the mortgage deduction be eliminated (your note), so should all deductions (ex-charities). Simplify the code, lower rates. You are correct regarding a consumption tax (titled appropriately as well).
           I too share your concern regarding religion. I understand what is at the crux of the issue for you. Religion over its existence has engendered great levels of strife still very much with us today. There simply is no way around this paradox. Religion is to foster order and peace, yet look at things. To maintain some level of faith, one has to wade through all of the ill-propaganda and seek truth. It’s that simple. By the way, regarding the excellent Tao allegory pertaining to fording a river in winter, imagine one’s children (or perhaps one’s parent) on the other bank. How should one behave in this instance? You know the principles of Confucianism in this regard. You know Judeo/Christian thinking regarding elders and children, too.
           I said I’d keep it short, therefore, I’ll close saying that I’ve visited the BBC site and fully appreciate the German history presented on the pages. I may purchase the book as well. It is interesting you find Germany of such interest, given their proclivity for socialism, high tax rates and unions. However, their writers and musicians are certainly worthy of great consideration and the citizens do maintain their government’s financial books. Perhaps your interest is derived from your Saxon roots…
           Pardon any grammatical or syntax errors, these blurbs are often written impromptu. Hope to hear from you soon, I remain,

Your most humble and obedient servant,

Periwinkle

Post Script. By the way, I read Hard Times over the recent weekend, a critical look at utilitarianism. I am part of the way through Bleak House. You might peruse the former. Thoughts come to mind regarding the mining industry in our old area during earlier days. Education is the future, yet manufacturing is as well.

All Hallows’ Eve

31 October 2015

Periwinkle,

           I spent a little time recently reading sections of Bokencamp’s The Xiang’er Commentary to the Laozi (1). As you realize, I have a tendency to stray occasionally. Lately when this occurs it’s been to the East where I do find various philosophies of interest. I do feel to some extent that the three branches of Abrahamic religion have been marred by the reactionaries. I reckon this is nothing new, Periwinkle, but it feels more relevant today than ever prior during our lifetimes. Schopenhauer, Nietzsche and Mencken perhaps took their destain a little too far, though many of their respective points garner considerable merit as well. Religion does carry its parallels to enslavement. I’ve ordered an older copy of the Jefferson Bible (2) recently. Simply to approach the subject of theology from a more philosophical aspect, maintaining the ethical and moral traditions. R.W. Emerson’s Transcendentalist take still looms large in this area as well. Adams’ Unitarian thinking. At any rate, where was I going? Oh yes, so I read through some pretty nifty commentaries pertaining to the Dao De Jing in the Bokencamp work mentioned above. In an early section, the writing alludes to commentaries on the nature of the ancient nobles:

‘They were hesitant as if fording a winter river,
cautious as if fearing their neighbors.
They were as self-controlled as guests.
Dispelling [their emotions] like ice that is beginning to melt;
Undifferentiated like uncarved wood; broad as a valley
They were complete and uniform, like muddy water.
Muddy water will gradually clarify through stillness.’ (3)

           Look again at these lines from the Laozi, Periwinkle. What do you glean? One more time… The first two lines immediately got my attention and probably grab you as well, being one who relishes the outdoors. What goes through your mind prior to fording the Penobscot or Elk in winter? ‘Why am I doing this’? Or, maybe on a lighter note, ‘I really love that damn dog, but…’ Most likely there better be a pretty compelling reason to do so, right? I realize, knowing who you are, Periwinkle, you’re reading this saying ‘Get to it Tetraneuris. Ok, ethical considerations come to the forefront when considering weighty matters. What is being deliberated’? This most likely is not simply a trip across to get the Midge one foolishly cast into a tree on the distant bank in February when one most likely should not have been fishing in the first place. Winter, rivers, peril. The ‘Celestial Masters’ hit a cord on this one, Periwinkle. What of the next line regarding caution? Again, this is a remarkable allegory that can in my view be applied to international relations – not simply will John next door see if I intentionally eat the remainder of the pumpkin pie. Confucianism and Daoism contrast with one another, regimentation and family structure, versus the sometimes chaotic basis of Tao’s nature – Yin and Yang. Two philosophies meshing, one common end. In this line, I believe, there is some commonality. Taking matters from the family, the local, to the larger community. How is a state behaving? Are its leaders concerned about how the country is perceived on the global stage? Is there short-term thinking being employed, or are longer-term implications clearly being considered? I deeply appreciate the first two lines. ‘Those fording a river in winter are terrified. Those who fear their neighbors do not dare commit a wrong for fear that it will be known throughout the village’, Bokenkamp translates (4).
           ‘They were as self-controlled as guests’. Another great line. ‘Self-denying’, is the commentary. Do we conduct ourselves in this fashion at all times? This is significant self-control. Regarding the next line and emotions, the Dao references water. Allow one’s emotions to melt. One thinks of a gradual, but proper process. Letting go. On this side of the state eventually reaching the great Pacific via the Columbia Basin. Your neck of the woods, well I reckon it depends on where you happen to be at the moment, but eventually the Atlantic. Uncut wood. A reference to not standing out. Humility. ‘Back to the original simplicity’ according to the commentaries (5). One can see some parallels with others’ thoughts. Seneca’s writings regarding simplicity are well known. Perhaps a reference to Jesus’ thinking regarding children may be noted here. Also, Diogenes of Sinope, that fine apostle of reason and virtue who lived in accord with nature. The importance of the initial state, Periwinkle. Not standing out. Regarding the muddy water, learning to be still is a learning process (muddy). One thinks of transparency, deviating from the masses through integrity. Subtle stillness.
           For a further look at the excellent symbolic nature of water in Daoism I cite from Moss Roberts’ Dao De Jing, The Book of the Way (6):

Stanza 8

1 Perfect Mastery works like water:
2 A boon to every living creature,
3 In adverse relation never
4 At home where most can not abide,
5 Closest to the Way it lies.
6 For position, favor lower ground;
7 For thought, profundity;
8 For engaging, gentility;
9 For speaking, credibility;
10 For ruling, authority;
11 For Service, capability;
12 For action, suitability.
13 Avoiding confrontation
14 Eliminates accusation.
15 There is no other way.

           There is much to glean from the Tao’s ‘Stanza 8’ regarding the symbolic nature of water. Truth, what is good. ‘A boon to every living creature’ (life giving, also perhaps love one’s fellow man), ‘In adverse relation never’ (flows around or over obstructions, not defensive or aggressive – ‘avoiding confrontation’), ‘For position, favor lower ground’ (humility), ‘At home where most cannot abide’. Simple and proper thinking. Water also has its purification and dilutive aspects.
           Shifting gears to contemporary dope, I see the Central Bank decided at its latest meeting to maintain the present low interest rate levels. This will carry into December at which point the Fed’s voters will meet to again reassess matters. We’ll see how things develop over the period before us, Periwinkle. I’ve read numerous articles on the deceleration of corporate revenues. For example, ‘U.S. Companies Warn of Slowing Economy’ (7) and ‘The Age of the torporation’ (8). How can global economies be as anemic as they clearly are and multinational revenues not slow? The emerging markets (EMs) have been having a hard go of it lately. U.S. Central Bank policy is sensitive to this. The slowing EM economies have had a greater impact on Europe than the US, where exports unfortunately play a lessor role. However, Europe slowing further will not be helpful to US growth. I regardless remain in the ‘gradually raise rates camp’. Short term this will mean more strength for the dollar which will not help the above; however, rates too low for too long causes other problems. A small increase or two will not impact lending to a significant degree. Nor do I believe coming ‘off of the bottom’ will have a significant impact on demand (the great and unfortunate US driver, consumption); but, gradually raising rates may help to offset other potentially troublesome areas. There is little incentive for saving today. There is a great deal of incentive for borrowing. This is not proper thinking, though it has stabilized matters following the recent crisis. The policy mindset needs to adjust, Periwinkle. We’ve discussed this before, but it always bears repeating. Think long-term. See above jargon for one aspect on proper thinking.
           Long-term means having the fortitude to making big adjustments for future and enduring health. Eliminate the mortgage deduction. Raise gasoline taxes (fuel prices are down and expected to remain so for a while). Have a consumption tax across all sectors. Hear the howls of ‘but this is regressive taxation’! Or, ‘these policies will shut down the economy’! ‘What we need is more government borrowing and spending’! So forth. You know the improper (usually academic) tune. Call these new revenue sources War and Entitlement Taxes. Look at the history of our rising debt levels and one can understand from whence it arose. Divert these new revenues to a trust account for the lowering of the U.S. national debt. Do not allow this trust to be invaded for other purposes. Second, and this is a very important part of the new package, lower taxes that will incentivize work and saving. Lower income taxes ‘across the board’, raise the maximum amount that can be contributed to tax free Roth IRAs, and lower the FICA income taxation threshold ($118,500 at the moment) to incentivize self-employed business creation. Hear more howls, ‘but Social Security needs more inflows, not less’! Phase out the dinosaur. Let the populace use their minds. Incentivize saving, not the purchase of new vehicles. Raise the retirement age, lower payouts, and implement an income scale for benefits while gradually phasing out the sacred cow. ‘But I’m 50 and self-employed and have paid in almost 15% of much of my income over the last thirty years! Now you want to take away what I’ve contributed’! These are the true payors; those who will look on and say, ‘well, I reckon I’ve contributed to the ‘greater good’. Everyone sacrifices. Leave it at that. Look at what today constitutes half of the nation’s annual budget. Serious reforms are needed, Periwinkle. How to maintain a sound currency in a more competitive future environment, legislate reforms. Central banks have given the legislators time. Is the issue being addressed? See the new budget proposal, ‘Paul Ryan Starts Off on Wrong Foot With Budget Deal’ (9). The senior concern regarding the above mentioned proposals (not from the Ryan article), keeping in mind the already cited revenue slowdown of the larger corporations, is the lunacy of implementing new consumption taxes while perhaps staring into the face of another economic contraction. It is after all a consumption driven economy. And, to raise rates at such a time? What about further strength of the dollar and its global economic impact? Things are anemic… We just got a 1.5% GDP number, lower than expected. Markets are eventually going to drive changes, Periwinkle. Begin phasing things in while the economy is growing.
           If the economy does slow, what about the accompanying rise in unemployment? You already know the participation numbers. What about the populists? The U.S. today has one running in each party. One a socialist, the other a fellow with a poor business track record and a ludicrous stance regarding immigration. If one of the two is elected, so be it. The U.S. already has many socialist attributes. The aforementioned entitlement programs, heavy regulation of firms, the welfare state, government ownership of real property, significant taxation, significant environmental regulations, many levels of government agencies and programs. Outright or direct ownership of the means of production are not an issue at the moment, but indirectly the contributions of the above mentioned items have a similar detrimental economic affect. Further, I’ll grant that a populist socialist (as contrasted with say a democratic socialist) will trash all of the reforms suggested above (ie., reforming entitlements), but pendulums swing back and forth over time. Actually, both versions would dismiss the above suggested reforms… How might a populist socialist be defined versus a democratic one? Both claim to represent the common people. The former may be more prone to fall into what Hayek described as the authoritarian group, however. The typical populist mold of today is that of the anti-immigration, anti-international organization, anti-federalist, Euro-skeptic type. Populists can be on each side of the fiscal spectrum. Far left versions are severe collectivists, ‘property is death’, types. Contrast these entities with the more traditionalist socialist parties in Europe. Poland’s recent outcome has the anti-immigration theme. Other populist parties, entities (there are many)… National Front in France. Germany’s AfD party. England’s UKIP and now perhaps the Conservatives for Britain (Euro Skeptics), Corbyn has populist leanings… If ‘populist’ sentiment continues to make electoral ground, so be it. Constitutional governments, elected bodies, should be able to maintain the rule of law. Heck, we’ve both advocated commercial relations with Communist regimes. Why? Because, trade is beneficial to US citizens. Trade opens politically repressive states. If a country moves from a market based economy to a socialist economy, that is the election outcome (albeit the wrong route to prosperity).
           What’s the fear? The Weimar experience. Governments today continue to be saddled with over encumbered balance sheets and significant pension obligations. Weimar it was reparations and humiliation at Versailles. People are suffering today. Employment levels have dramatically improved from the 2009 period, but living standards remain difficult as wages reflect the low inflation environment. These conditions are why it is likely interest rates will remain at low levels for an extended period of time (think Japan). Due to government obligations, inflation will likely remain tame. Government mandating wage increases is not the answer. This will result in fewer available jobs. Protectionist measures and obstructing free trade are certainly not the answer. Additional government spending (borrowing) is not the answer. War is not the answer. The latter two are immoral. What’s the remedy? Time and sacrifice. When a family has borrowed too much, spending is cut and debt payments are increased. Governments need to remain on this path while continuing to find ways to incentivize business creation and saving. Governments have the added burden of pensions. Policy makers have to be candid, reforms have to continue. Rate expectations for pension calculations have to continue coming down. Contributions going up. Transitions to defined contribution plans continued.
           In the US there is a wrinkle. The politicians have allowed the people to believe the status quo (remember Friedman’s The Tyranny of the Status Quo, Periwinkle?) can go on. Granted, 08/09 was a wake up call for everyone, but today things feel to have reverted back to the usual routine. The debt ceiling gets raised, things go on as usual. This has been a failure of our Federalist system. As long as creditors are willing to purchase our obligations, it can continue; however, what is the reality? Eventually, this business will end. It does not have to be dictated in the markets in a brutal fashion. Politicians need to act as Trustees rather than Delegates, coming clean with their constituents. Getting out of our economic jam is going to require sacrifice by all citizens. We have been irresponsible. We’ve over spent. If we do not correct these problems in a tranquil manner, the markets will eventually force the issue. We need to cut spending, cut pensions and raise taxes. It’s not a very savvy political message for those hoping to get elected next fall, but it’s the truth. Otherwise, eventually the currency will be the issue.
           As we’ve discussed over and over, Periwinkle, war and inflation are not the remedies for the globe’s present ailments. War has played an immense role in the mushrooming of our debt levels. Immense. Given everything mentioned above, can the nation continue to finance additional wars? Be honest. No. The citizens of the United States have a great sense of their ability to compete, to produce competitive high quality goods and sell them throughout global markets; to have excellent educational institutions and research centers. This should continue to be the approach. Competition, not conflict.
           I recently read Germany: Memories of a Nation by Neil MacGregor (10). I came across the book initially through a review ‘The Myth of the Two Germanys’ in the Wall Street Journal’s Saturday edition. The write up by Neil Gregor, editor of the journal German History, was quite critical of the work (11). Therefore, I ordered a copy. By the way, before I forget to mention it, the latest German History has a nice study on the Brazil/German historical relationship. The issue also strays into the Germanic influence in the development of other areas in South America as well – the September edition (12). At any rate, Neil MacGregor is the former director of the British Museum. Today, according to Prof. Neil Gregor’s article, Mr. MacGregor is a museum advisor to the Merkel government. The book (published in 2014 in the U.S. by Alfred A. Knopf) is part of a collaborative work comprised of a radio show by BBC 4 and an exhibition at the British Museum: ‘Germany: Memories of a Nation’ (13). The book having come out last year, I’m not sure why the review in the Journal is in October of this year? But, I’m glad it was. A second review I’ll mention, ‘History Lesson‘, was in The Economist last year (14). This review was a bit more favorable.
           Now that I’ve cited a few of the professional reviews (there are many, by the way), I’ll start off saying that I enjoyed the book and certainly felt it was educational. I would actually recommend the work as part of the history curriculum for upper class high school students. The reason for this is that the work not only comprises well written German history, but European history as well, Periwinkle. It’s all there, from the rising of the Brandenburg Gate in the latter 18th Century as a customs site, to the Berlin Wall’s removal a quarter century ago. In this work, however, what makes the book are the vivid illustrations, photographs and objects. Photographs such as that of a worthless Eine Billion Mark note and that of woman burning hyperinflation bank notes in her stove, both illuminating. Photographs of the prisoners lying in horrid conditions in Buchenwald. Photographs of bombed out Dresden and children slowly picking up the individual bricks. Photographs of the handcarts being toted by freezing refugees resulting from the Potsdam Agreement. Illustrations and objects of amazing works of art are incorporated into the work, including the ‘Pieta’ and ‘The Grieving Parents’ by Kathe Kollwitz, and Durer’s many Nuremberg prints and plates. The etchings of these two artists are remarkable. Readers through the images alone are able to glimpse significant German history. The importance of the development of Gutenberg’s printing press (in Mainz) is discussed. The story of Johann Bottger, the Dresden alchemist who discovered how to produce porcelain, is covered.
           A photograph in MacGregor’s work of Hitler in a convertible VW in 1938 with Ferdinand Porsche leaning over reminded me of the Hoover Institution’s Prof. Anthony C. Sutton and his work Wall Street and the Rise of Hitler. You probably recall the discussion by Sutton on the role of international industrialists and financiers in the development of the Dawes and Young reparations plans in 1924 and 1928. Also, the discussion of other characters who aided in the development of the Wehrmacht and the cultivation of international corporate socialism. ‘Henry Ford was an early (1922) Hitler backer and Edsel Ford continued the family tradition in 1942 by encouraging French Ford to profit from arming the German Wehrmacht. Subsequently these Ford produced vehicles were used against American soldiers as they landed in France in 1944’ (15). Sutton discusses the role of cartels, I.G. Farben and others, tied to U.S. corporations and financial institutions. Since I’ve digressed here a touch, I’ll note an important item regarding today versus the Weimar era. Today we live in the age of nuclear deterrence which checks nations. It is in understanding this backdrop that one should continue to foster global trade with all nations, communist, socialist or otherwise. It is in the interest of U.S. citizens to cultivate open commercial relations with China, Russia, Cuba, Iran, Saudi Arabia, Vietnam and all other nations. Exports to emerging economies are one of the big U.S recovery strategies for far sighted thinkers. This will become less difficult in time as the currencies of other countries rise as their per capita wealth increases. At the moment, given the lousy global economic state, the dollar is likely to remain elevated. However, given an eventual global economic recovery, U.S. exporters should benefit as the dollar relatively becomes more realistically valued. The U.S. can do much to make its goods more competitive through basic reforms such as lowering the regulatory burden on firms and changes to corporate income tax policies. Hopefully economic growth will continue to foster liberal reforms in communist commercial partners. In his letter to Thomas Lomax on 12 March 1799, Thomas Jefferson echoed George Washington in stating ‘Commerce with all nations, alliance with none, should be our motto’ (16).
           MacGregor’s work covers the great German literary figures, including Schiller, Goethe, Herder, Marx, Engels, Heine, Mann and others. Also, the musicians Mozart, Wagner, Haydn, Handel, Bach and Beethoven, are touched upon. The discussion of Goethe’s work, Sorrows of Young Werther and its impact on Germany literary development was of interest. ‘Werther was a cult book for a generation, a passionate argument for the importance of the heart in the human condition; it is our emotional depth and power, Goethe is telling us, that really defines what it is to be human’ (17). Walhalla, the Bavarian shrine (Hall of Heroes) to past Germans, is discussed, including commentary regarding the conflict between Catholicism and Lutheranism, and Jewish discrimination. ‘The nineteenth century poet Heinrich Heine, acerbic, lyrical and ironic, had long been absent – partly of course because of his Jewish descent, but also because he was a severe critic of the very idea of such a shrine to the great. He thought Walhalla absurd, publishing a satirical poem mocking Ludwig for building this “field of skulls’’ (18). Heinrich Heine, truly one of the greats.
           MacGregor discusses the horrible atrocities committed by the Nazis against the Jewish people. The work incorporates images and objects from this period. Part Five, ’The Descent’ and Part Six ‘Living with History’ dedicate numerous chapters ranging from the latter Bismark era through the Second World War. MacGregor discusses Bismark’s rise post the failed 1848 revolution. Denmark’s defeat and loss of the Duchy of Schleswig to Prussia, followed by the subsequent defeats of France and Austria. German unification in 1871 and the rise to Chancellor of the Reich by Bismark are discussed. Bismark’s social policies, including the implementation of tariffs and the development of a welfare state, are covered. ’These policies too were double-edged, designed to see off the demands of the liberals and the Left. To many Germans today, he remains, as he was in life, a destructive, divisive figure, who ruthlessly thwarted the development of a coherent social democratic movement, with dreadful consequences in the twentieth century’ (19). I will grant Gregor’s criticism in the Journal that the coverage of the development of World War I is lacking. However, the discussion of the Weimer period is extensive, including the hardships faced by the German public due to the reparations and the rise of hyper inflation. Hjalmar Schacht’s inflation remedy is outlined, backing the new Rentenmark with properties. A successful stabilization method. The rise of the Nazis is discussed. The Nazi party using the currency crisis to persecute the Jewish people is outlined. The effects of the Depression and Hitler’s rise to Chancellor is discussed. The burning of the books in 1933 is mentioned. Heine’s 1821 remark followed, ‘This was merely a prelude: where they burn books, they end up burning people too’ (20). The persecution of the Jews, communists, and homosexuals is discussed. Buchenwald is covered with photographs and a lengthy discussion. MacGregor notes the importance of Roman law in German history, a fine section. Eisenhower’s visit to Ohrdruf is covered and his wishing to make sure that the people never forget the atrocities which occurred there.
           It was interesting to read the section ‘Living with History’. MacGregor interviews Rabbi Mendel Geurewitz who moved to Germany from the U.S. in the early ’90s. Part of the discussion in the work pertains to the Jewish migration to Germany during the post war period. Many European Jews immigrated to other parts of the world, yet some also remained and settled in Germany. When the Wall fell in Berlin, many of the Soviet Jews settled in Germany. ‘Two hundred thousand Jews moved to Germany after Helmut Kohl, in 1990, agreed to grant them immediate asylum and offered them financial assistance and every facility to integrate into the country. Those Russian Jews chose Germany in the full knowledge of what had happened fifty years earlier…’ (21). MacGregor notes the destruction of the synagogue in Offenbach during ‘Kristallnach’ in 1938. Rabbi Gurewitz discusses in the work the construction of a new synagogue in Offenbach by largely Polish Jews who remained in the area. Gurewitz also alludes to the positive aspects of his own relocation. The above quote regarding Helmut Kohl, Periwinkle, did have me recollecting the former Chancellor’s abilities. His leadership skills were significant during his lengthy term in office. Germany and Russia have enjoyed warm commercial relations since the fall of the Berlin Wall. Today, however, these relations are strained due to Russia’s recent actions in the Ukraine (Crimea) and Western imposed sanctions.
           Finally, Periwinkle, I’ll point you to German historian David Blackbourn’s History of Germany: 1780-1918 and specifically Chapter 9, ‘The Old Politics and the New’, for an excellent summary of the pre-World War I social, economic and political environment in Germany and Europe (22). Blackbourn looks at many aspects of the German Wilhelmine society during the period, including the limitations of the Constitutional Monarchy. He discusses the rise of nationalism, fostered through the development of the many Leagues of the period. These included the Pan-German League, the Defense League and the Navy League, each with their hundreds of thousands of members and their various industrial interests. Germany’s Grasp for World Power, written in 1961 by Hamburg scholar Fritz Fischer, is alluded to, including the various aspects of the Fischer thesis. Specifically the question of whether or not ‘Germany had consistent and aggressive war aims before 1914’ (23). Blackbourn concludes regarding the thesis, ‘The Fisher thesis sparked bitter controversy in Germany. Older, established historians attacked his views, rejecting the argument that Germany bore prime responsibility for the war… Many younger scholars followed Fischer… A generation on, two things are clear. First, while the Fischer controversy is now itself a part of history, the subject of many books and articles, it still provides the framework within which the origins of the war are discussed by both German and non-German historians. Secondly, there is no current consensus. Many adhere to a more or less modified version of the Fisher thesis’. (24). Blackbourn reviews the development of the Triple Alliance (Germany, Austria-Hungary and Italy) and Triple Entente (Russia, France and Britain). Also covered in the work is the significant arms development of the various actors during the period, the economic and political stresses, the colonial issues, ethnic and racial issues, and briefly noted is the decline of the Ottoman Empire (24). Keep in mind our constant discussions relating to Washington and Jefferson and the other American founders who warned against joining blocs or alliances, Periwinkle, should you visit Blackbourn’s account of Europe during the late 19th and early 20th Centuries. Doing so will have you looking at the world today and scratching your petals. What has man learned? Does man consider historical events? Perhaps one of the differences today which we’ve highlighted in past letters is the degree of financial leverage at the government level. This may act to curtail contemporary conflict. Let us hope this is the case. Commerce, not conflict.
           I referenced the Blackbourn work (a copy of which I own) simply to contrast with Gregor. Blackbourn is cited on the back cover of Germany: Memories of a Nation – ‘He (MacGregor) has written a remarkable set of reflections on the objects and places of German memory’. The full review is here: ‘Germany: Memories of a Nation – Neil MacGregor – Review, bold, fluent and sharply intelligent’ (25).
           Sorry for the semi-formalities in the epistle, Periwinkle. I simply thought I’d incorporate a brief Works Cited page for your own reference. As I conclude, I can hear the wind blowing outside and see the few remaining autumn leaves, with their golden and brown hue, fluttering on the Aspens. This All Hallows’ Eve weekend rain drop beeds have formed on the windows, running their course. Missoula can use the moisture! Hope to hear from you soon.

With a handshake,

Tetraneuris

P.S. Sorry about the lack of umlauts above.

‘Und Wer’s nie gekonnt, der stehle/ Weinend sich aus diesem bund’ (26).

______________________________________________________

1 Bokencamp, Stephen R. Early Daoist Scriptures. Berkeley: University of California Press, 1997.

2 Foote, Henry Wilder. The Jefferson Bible – The Life and Morals of Jesus of Nazarath by Thomas Jefferson. Clarkson N. Potter, 1967.

3 Bokencamp, 98.

4 Ibid.

5 Ibid.

6 Roberts, Moss. Dao De Jing, The Book of the Way. Berkeley: University of California Press, 2004, pp. 45.

7 Francis, Theo and Kate Linebaugh. ‘U.S. Companies Warn of Slowing Economy: Big firms to post first decline in earnings and sales since the recession’. Wall Street Journal, (online) 25 October 2015.

8 ‘Peak Profits. The age of the torporation: Big listed firms’ earnings have hit a wall of deflation and stagnation’. The Economist 24 October 2015, pp. 59-60.

9 Harsanyl, David. ‘Paul Ryan Starts off on Wrong Foot with Budget Deal. Boehner hands him defeat on the way out’. Reason, (online) 30 October 2015.

10 MacGergor, Neil. Germany: Memories of a Nation. New York: Alfred A. Knopf, 2014.

11 Gregor, Neil. ‘The Myth of the Two Germanys: Evoking a humane land of poets, thinkers, musicians and goldsmiths in which the Nazis were strange outsiders’. Wall Street Journal, (online) 16 October 2015.

12 Penny, H. Glenn. ’Special Issue: Germans and Brazilians’. German History Vol. 33, No 3, September 2015.

13 BBC & The British Museum (2014) ’Germany:Memories of a Nation’ Available at: http:// http://www.bbc.co.uk/programmes/b04dwbwz

14 ‘History Lesson’. The Economist, (online) 8 November 2014.

15 Sutton, Anthony C. Wall Street and the Rise of Hitler. Seal Beach: 76 Press, 1976, pp. 165.

16 Jefferson Writings. Edited by Merrill D. Peterson. ‘Letters 1799: To Thomas Lomax’. New York: Penguin Group, 2011, pp. 1063.

17 MacGregor, 140.

18 Ibid, 170.

19 Ibid, 389-390.

20 Ibid, 441.

21 Ibid, 525.

22 Blackbourn, David. History of Germany 1780-1918: The Long Nineteenth Century – Second Edition. Malden: Blackwell Publishing, 2003.

23 Ibid, 335.

24 Ibid, 339.

25 Blackbourn, David. ‘Germany: Memories of a Nation by Neil MacGregor – review, bold, fluent and sharply intelligent’. The Guardian, (online) 23 December 2014.

26 Schiller, Friedrich. ‘Ode An Die Freude’

29 August 2015

29 August 2015

Tetraneuris,

           I do appreciate your letters. We should attempt to correspond a bit more often as we’re not getting any younger. Glad to hear you’ve let the beard come in again. I reckon this has been somewhat of a fall tradition, though it seems a little earlier this year. Sorry to hear about the smoke in Missoula. Perhaps it will take the cooler temps and early mountain snows next month to put out the fires in Montana and neighboring Washington. Missoula fishermen have had a rough summer with the streams having been closed to fishing early in the afternoons given the warmer weather. I know you hate the inversions in February and March, so being socked in today must be a bit depressing. Nature seems to take awkward courses today, more so than when we were younger. Things seem more severe than they used to be, storms causing greater loss and having more material impacts around the world.
           It won’t be long and the colors will be expressing themselves in the surrounding hills. It’s a shame you’re not going to make it back this season for the birds. Candidly, I was hoping this fall we might make it up to the White Mountain area again. It’s been a long time, Tetraneuris. Do you still have the deer rifle you bought decades ago at Kittery? At any rate, the Birch River corridor will be as beautiful as ever next month with the yellow and orange leaves forming their golden patterns as they drift down the small clear channel; bright red and dark purple reflecting in the water as well from the turning canopy above. I realize you miss the hardwoods. Come back and we’ll have a stroll through historic Spring Hill as well. Bring the Fuji and take a few shots of the old place. Like the changing of the seasons, some things remain quietly and tranquilly constant.
           So, I see they’ve sold your two favorite papers. This must be somewhat disconcerting for you as I realize how you embrace change – always with a wary eye, that is. The last time a major financial paper was sold, well… We’ll see how it plays out. Things clearly were already adrift as the old economic libertarian slant was beginning to somewhat wane. Speaking of somewhat wane, do you sense that the US openness to traditional liberal trade is dissipating? Is the US economically turning inward? I’m not talking about on the military front where clearly the US footprint remains erroneously in most places. I’m alluding to trade. Mao of course turned economically inward as well… I simply don’t understand matters today, Tetraneuris. How to retard growth, turn inward. The western press seemed to recently have a field day pouncing upon the declining Chinese stock market. Everywhere one went for information, the internet or traditional paper media, the end of the Chinese growth story was nigh. What has been the performance of the Chinese market over the last twelve months overall? Headlines and general tone dictate matters… Have the Chinese yet allowed back the Great Search Engine and NY financial paper, or are they still taboo on the mainland? Honestly, I’ve not looked into this recently and maybe things have changed?
           How much correlation does the Chinese stock market have today with the country’s overall economic condition? My guess is their market is not as much of a leading indicator as markets are in other parts of the world. Quite simply, their market is immature and very much still in development. This, of course, is the state of the country itself (though the world’s second largest income producer) as it becomes more and more transparent, which, certainly, remains China’s larger issue. Communist states quite simply are politically less open. This will have to change. I remain a believer that as Chinese living standards rise, the country will adopt a more open political state. Markets will drive this, as the country seeks greater financial status in the global economy. Countries, like firms, go through hick-ups, or pauses to breathe, during growth periods. Perhaps, economically, China has reached such a condition. China has not been immune to the real estate situation and has its own debt related issues. Government allocation of resources is not the way to go about things (witness the new US bent). This deceleration in China (and that of other previously more rapid growing economies) is reflected in global commodities prices; this has been the case for a while now. Again, Tetraneuris, it may be the case that a collapsing economic situation in China brings about a hardening of the political apparatus rather than continued liberalizing. Curtailment of western investment in the region (turning inward…) is having an impact. The west should hope the country continues to sort its way through the maze of constructive transformation rather than the opposite (collapse), which the press seems to almost advocate. What are your thoughts, Tetraneuris? It also does not help that as Chinese citizens experience prosperity many desire to abandon the shackles of a Communist regime rather than remain and attempt to drive political change; though, this is also understandable. Who, after all, desires to live in a government controlled state? Some folks might argue that it took a doubling of the US debt load, given the immense military spending of the ‘80s, to hasten along the economic collapse of the Soviets; however, look at our balance sheet now as this mode of thinking carried itself forward through subsequent decades with nonstop military intervention hither and yon (though with different objectives.). Further, look at the subsequent ‘political openness’ of Russia and many of the former Soviet states. Perestroika today has a whole new meaning (if one believes what he reads, which remains subject). Might it simply have been better to allow the Soviet system to economically collapse on its own without an arms race? This seems to me to be a perfectly fair question today. Might the Chinese political system have to change given the country’s economic aspirations? It might indeed.
           The remilitarization of the Japanese understandably has other states in the region concerned. This is proper thinking when viewed through an historical lens. Militarization is being advocated by the US and parts of Europe against the average Japanese citizens’ wishes in order that (1.) western security expenditures in the region may be lessened and (2.) if the region finds itself in conflict, Japan might be able to protect itself and help defend its allies. Given the Japanese economic state, I’m not sure how this can be pulled off, but it appears to be the direction things are headed. To a degree, this shift (what would it be, geopolitical military balance of power…) can be seen beginning to occur in Germany as well. Here, the thinking is playing a greater role in the Middle East (equipment/financially/personnel…). I sympathize with the general German and Japanese consensus, however, which is passive – let’s spend our money in more constructive ways and hope deterrence is not simply something of the past. ‘Let the great nuclear hegemons continue to figure it out without us. We’ve got more important things to do, like manufacture well functioning cameras and automobiles. Trade is what’s important…’ Yet, one also would like to see these two economies carry their weight if these great Middle Eastern and Asian military excursions/security arrangements are going to continue. Are they necessary? Is our country going broke maintaining such interventionist policy arrangements? Should the Japanese have to go to war if the US and China somehow find themselves in conflict? Why is there such an apparent drive towards conflict with China? Tension is everywhere in the region at the moment. Currencies would be a fun subject to touch on, but I’ll wait for the next letter. It seems to me that a country would not desire conflict which generally adheres to harmony, humaneness and sincerity as top ways to conduct one’s self. Any thoughts? Remember, economically the world cannot afford war today. This is basic thinking 101. Look objectively at the state of the global economy. Who’s going to finance another war?
           Ask yourself, Tetraneuris, What is really driving the state of global conflict? Is it more than differing opinions on political economy? What of the role of religion? Is technology helping mankind or a significant detriment to the world today? Has it drawn the world closer together, or pressed matters further apart? Subjects for the next epistle, I reckon. Hope the smoke abates, my friend. I remain,

Your humble and obedient servant,

Periwinkle

“That’s a matter for The Committee”

                         8 July 2015

Periwinkle,

   That which is least
   Natural is least fluid.

             Well, I thought I’d drop you a brief line this morning. Recent events have been of interest. It is simply a fact that today, perhaps more than ever prior, one must be able to glean what governments, central banks, NGOs and sovereign wealth funds are themselves intending prior to making any material decisions one’s self. Think this through a bit while sitting on the riverbank under the shade of your favorite local oak. The above noted players are nothing more than themselves market participants. Add in pensions, d/c plans, hedge funds, mutual funds, annuity subs, private equity, the large firms and you’ve come close to covering the players which dictate behavior. The committees. Retail is there as well, but principally through the above.
             In November, the Chinese opened the gates. By June, things had gotten quite elevated. Recently, matters reversed. What role have the above global characters played in the build and reversal? There has been much in the limelight about margin and local retail, but one should glean reality in part from the more lofty institutional folks and their actions. The move by the Chinese regulators to limit selling by the greater percentage stake holders was a shrewd decision. This may have curtailed the vehement conviction of the “negatives”. Who are the negatives? One does not know the true state of finances in the People’s Republic. Opacity still looms. What are the liabilities at the local level? Entitlements, demographics… However, is this new? Does it relate to recent market behavior? Are things coming to fruition? Or, is another day in the wild west playing out?
             It was unfortunate to read that the Conservatives have given in to the hike minimum wage theory. This evidently is being cast as a political trade off related to the soon to be implemented welfare reforms. It should remain the case that firms set their own wage schedules, not government committees. Man can think for himself, choosing an employer which offers the right blend of wages and benefits as seems suitable for his or her skill set and aspirations. Firms understand the global market place better than public committees and certainly the efficient allocation of resources. Governments appear to be reaching to elevate inflation. As you realize, Periwinkle, there are a host of reasons for this paradox; principally among them gross indebtedness. Drive prices higher, regardless of higher wages, drive economically nowhere. This applies here in the states as well as one can feel the pressure on the minimum wage front. Fathom if there were not the great indebtedness levels. Prices could decline and wage inflation would be less sought out by the committees. Low productivity may be the natural wage bump fix. Welfare reforms loom across many countries; mandatory wage hikes should not be the quid pro quo. Welfare in the US pales next to entitlements, defense, and interest on the debt as a percentage of the US budget. How transfers affect employment behavior, another matter all together. Speaking of budgets, local pensions and indebtedness, I see Puerto Rico and Chicago are the news again of late… Maybe public sector union reforms are going to finally play out, Periwinkle.
             Are firms behaving rationally “reshoring” their investments? Why would a US firm wish to relocate plants to the country given the newly mandated health care plan, which is unconstitutional, higher relative tax burdens (realistically likely to increase), environmental hurdles, significant regulations, and today potentially higher mandated wage rates? Energy rates are off so global transportation to markets costs less. Look at matters through a pure lens. Are markets behaving naturally? I remain firm in my conviction that it is without question in the interest of this country for the lesser developed countries to experience growth. There is a moral tinge to this, Periwinkle. Gleefully a greater bent towards the secular perhaps and less so towards global religious dogmatism. This mode of thinking seems out of favor lately, however. It means encouraging investment into the lesser developed countries. The wonks, their committees, are looking at things too much from a political / security standpoint. Down the road for a host of reasons we’ve already discussed, this will prove to have been a mistake. Cultivate economically the great populations of the developing states, productive future gardens. Rising global living standards mean higher international education levels. Further implications are better trade accounts and better national finances.
             It is understandable that developed countries need an expanding tax base to unwind the excesses of the past numerous decades. However, a rising global customer base is a greater consideration. To maintain and perhaps elevate domestic investment, provide the right economic climate. Given the fundamentals at the moment, this is not a simple affair. Folks are concerned about the economic divide. The fact is that monetary policy has to a degree enlarged the divide which is a phenomena of asset appreciation given a prolonged period of loose money. The policy authorities, sorry – committees – I wish to remain consistent, felt it their obligation to stabilize the global financial system to avoid what would have been a second Great Depression; however, the lengthy period of lower rates has had its standard effect of skewing matters. The wealth effect in this regard is less material for folks whose wealth is in their 401k and home. Business investment and entrepreneurial instincts are only somewhat influenced by prime at present levels. Therefore, the optimistic objective of getting wages to rise in this regard (new investment and business creation) is simply wishful thinking. It’s somewhat late in the day as well. Private sector demand is a greater consideration. Note I did not write public sector demand, infrastructure borrowing, etcetera… It is the case that the tax cut of lower interest burdens has been a financial salve; but, consumers, though certainly spending, remain concerned with continued balance sheet repair and saving rather than significant spending. Granted, of course, there’s not much incentive to save given present interest rates levels. How to further increase savings levels should be a significant consideration for the committee. We need more global customers. One might as well note also that the recovery is long in the tooth. Committees are going to be low on ammunition, Periwinkle.
             Might just as well close out with matters in Europe. Financially responsible, albeit quasi-socialist, states in the north are now being looked upon negatively in the press and by the non-financially responsible government leaders and citizens of some of the southern states. This was an inevitable and unfortunate outcome. Culture is a tough matter to change. The EU is not a federal body and the cracks are clear. The larger issue is how the project can tranquilly unwind. Sovereign states can trade among themselves. Most folks today are concerned about Greece exiting, but the honest question is, How can all countries exit peacefully with the lowest possible level of financial trauma? As we’ve discussed countless times, all matters economic and political are best implemented and maintained at the most local level. This is a natural and true state.

Better cut it off there. As always,

                     I remain your most humble servant,
                     Tetraneuris

Moving on a Slow Bell

5 May 2015

Dear Tetraneuris,

            I realize it’s been quite a while since you’ve heard from me. I thought I’d drop you a quick note. It’s almost three in the morning and I have been not sleeping too well lately so I may as well make use of the time. Yesterday at about this time I read Hardy’s The Going, Your Last Drive, The Walk and Rain on a Grave. Something about Hardy draws me. You should see the forests today, Tetraneuris. The Rhododendron, our state flower, are in bloom along with the Dogwoods. I came across a blooming schedule for your old stomping grounds in the Monongahela you may find somewhat nostalgic. It won’t be long and the Mountain Laurel will be taking off as well. You should really attempt to make it back here, you know. When was the last time? We need to canoe the Greenbrier. I imagine you are getting ready for the June hatches in you neck of the woods. Given those, I believe you’ve become somewhat spoiled and set in your ways in Montana. Remember the Small Mouths during our youth? That will draw you back for a visit soon, I’m certain.
            I was thinking early this morning about Bernanke’s new blog and his desire to see people put their economic thoughts to work in the modern era of electronic media. I decided at some point that he and Paulson probably made the correct decisions initially, recognizing the present day economic lubricant derives itself from the securitization markets much more so than from the traditional lending arena; therefore, the Fed’s implementation of the present day lender of last resort found itself being played out via the central bank’s securities purchasing programs and understandably so. Congratulations to Bernanke on the deserved consult appointments with the hedge and mutual fund organizations, an apparent post Fed tradition. Perhaps this is the end incentive of government work, which should be of a principally civic nature rather than today’s six figure government positions with elaborate health benefits and in many cases a pension available for the rest of the former employee’s life. I’ve found myself having to explain to my children, Tetraneuris, why our government (which includes the central bank) had to bail out the nation’s lending institutions, insurance firms, money markets, conglomerates and automobile companies as a “short term preventative measure” to derail the almost certain economic collapse that was going to ensue and most likely social strife thereafter. A financial crisis rather than the traditional cyclical inventory business cycle. “Why did we bail out the autos?” My sophomore recently asked me while we drove to her school. I found myself at pains to answer the question, as you might imagine. “If we had not done so, it would probably be the case that today you might begin seeing the fruits (in the form of new automobile brands in the country) of new innovations being made by new companies that arose out of the ashes of the depression we would be still recovering from today. Instead, in part for the maintenance of jobs, and in part the oft (perhaps ill) cited maintenance of national security (remember the old “ball bearings issue” and key industrial components of the economy we’re talking about here…), we see on the road the same gas guzzling pigs as were on the road prior to the debacle. Many new 15 mpg vehicles everywhere. I’m not sure if the zero interest rate game is being played again, working the margin on the higher priced guzzlers,” I recall saying in some fashion. Granted, gasoline prices have dropped given the slow global macro growth and increased world production. However, it seems a failure to see the same old song being played out at the Big Three. I reckon understandably better margins are still ruling the day with the expensive, big vehicles. If people will buy ’em, why should not firms produce them? It may be the case that technology investments in efficiency improvements is a glacial matter. Granted, one does see about a few smaller and a few hybrid types too. A local mechanic recently told me the “cash for clunkers” program (our Keynesian get out of jail measure in the vehicle patch) was now being played out in the form of no decent inexpensive used vehicles around in the area. Perfectly fine automobiles lying drilled out and destroyed in the scrap yards. “People don’t realize how much money it costs three years after purchasing that hybrid to replace the battery,” he said, saying replacing the battery was pretty spendy, something which I’ve not verified. Of course, new vehicles probably don’t find their way into the local mechanic’s shop either… I reckon folks do need those fancy computers running their new autos today… The opportunity cost of cash for clunkers is scarcity in the used vehicle market which hits youth and lower income level folks the hardest. A poor policy in hindsight which should have been better thought out at the time. Tax incentives in production of high milage, low retail cost vehicles is (and would have been) a better route. Today, a specially designated gasoline tax, set-up in a trust of some sort, to specifically reduce the national debt would be another sound idea as well. I, like you Tetraneuris, view taxes as economic impediments to growth, but oil is down, prices at the pump low and the nation is in a debt crisis. Higher pump prices will cause folks to heavily consider whether or not to buy the guzzlers as well. My son brought in a gallon of milk last night which he said was $4. “Yep, more than a gallon of gasoline,” I quipped following with a remark that inflation certainly exists in food land. The prices of fish and beef are astronomical. I understand the fish and scarcity bit, but overall, the average family is experiencing a rise in food prices to complement their stagnant incomes and low interest rates on their savings. The rising dollar and low fuel prices do not appear to be having much of an affect on certain items in the foods space. The same goes for medicine and the health industry. The inelastic things folks need, as usual. The cuts at the pump are at the moment somewhat of an offset, but how much and for how long?
            It seems to me that in Bernanke’s discussion of the equilibrium rate he neglected to note that the greatest players in the market environment today are the central banks. You probably caught the former Fed chief’s post. Markets have to accept that these “new” (in some countries) buyers and sellers are there and are going to, at least in the immediate term, remain in the markets without question affecting the equilibrium rate. This unfortunately means also that rates in the global bond markets will have a more dramatic influence from the political winds of the day. Granted central banks are supposed to be independent operators, but one knows to some extent the reality. As the equilibrium rate is influenced by the actors in the securities markets, and the central banks are Significant actors therein, it cannot be argued that central banks do not play a role in present day low interest rates affecting seniors and savers. Granted the term transitory was used, however, I recall hearing or reading subsequently it being argued that the central bank should be in no hurry to decrease its “positions,” (it continues rolling proceeds into the markets at the present) and policies such as quantitative easing may become a regular tool in the Fed’s kit. It should be the case (and has been to a small relative degree) in Europe that their easing program, were markets behaving rationally, should lower the interest rates of higher risk states; however, given the negative yields or zero yields of the financially stronger states and remaining higher yields in the weaker ones, it appears to be the case that the policy being employed is having a poor effect in the markets. Or, perhaps, were the Euro area easing program not in place, can one imagine what rates in the not as strong financial states would be at the moment? A touch of grey there, T. At least on the surface, things are not playing out the same in Europe as they did in the US. As you realize, there are many reasons for this which relate to a true federal system versus the present scenario. Then comes the debate about whether one is warranted in Europe and then the cultural issues… The European Central Bank, however, should recognize the truth for what it is and allow markets to naturally clear. This would be painful initially, but unemployment rates remain elevated in the financially weaker sections of the region at present regardless, so perhaps the interim pain would be not as great as one might reckon? Again, this is unclear.
            Unemployment levels in the States have improved. One of the latest monthly jobs numbers, however, reflects finally the collapse that has occurred in the commodity patch which has also begun to reveal itself in the revenues of related firms and their share prices. Generally employment though has been improving. The participation rate remains a conundrum, however, which should be deeply explored. Important questions need to be asked as not all of these folks are retiring boomers. Why are they not returning to the workforce? If the jobs are available, and perhaps the training (maybe even the education by some firms), why are workers not returning? Do people no longer enjoy working? What about those presently employed? Do Americans still enjoy working? The nation’s poor productivity numbers would indicate perhaps not. These, as you know, are important subjects that need to be better analyzed. Transfers need to be studied and their impact on today’s numbers as well. Private sector business creation rates, too. The usual stuff we’ve been discussing on and off for a while now.
            An analysis might be arranged to look into what impact lower rates in the bond markets and generally are having on the insurance industry. It’s clear firms in this space are raising their premiums to compensate for their lack of investment returns. Is there a future claims paying ability collapse on the horizon? It seems impossible to have sympathy for this industry (I should simply stop there) given the role some of its major players had in the collapse and the subsequent bailout the group received, but preventing a future one should be looked into as well given the consumer interest in the space. Like the autos, today we’d probably have new, young and successful firms in the insurance market which today do not exist. The bailout paradox, protection of the established in the name of protecting employment and consumers… This regeneration principle can be applied to the banks as well. New bank creation remains off. Given the immense regulatory regime, competition apparently is being hindered by the lack of drive for new firm creation. Economic collapses have their healthy flushing benefits if allowed to play out. It still may well do so as things are more precarious than perhaps one realizes, understanding the unwillingness of legislative bodies to curtail bad habits and address reality. The Great Transfer slogs on, Tetraneuris, risks remaining only at different levels. Low interest rates allowing governments to roll their obligations and exist. Meanwhile, industrial production languishes.
            At some point, Tetraneuris, we should revisit Japan, China, Brazil, India, Russia, Canada and the other non-Euro economic players to note their economic issues and how they relate to ours, including currencies and how things are playing out at the moment in that realm. However, since I don’t want to put you to sleep reading perhaps what you may already realize, I’ll cut it off here until our next visit. Hope you drop me a line soon, or better yet head this way. Good luck with the spring fishing and on the tags this year, I know you paid a small fortune entering the special permits drawing for your children. Hang on…

Cheers,

Periwinkle

On TV Shows & Other General Issues

10 March 2015

Periwinkle,

          I hope you’ll accept my apologies for not having written in quite a while. At last, the numerous current events have dictated the desire to type out a brief epistle updating you on matters. Once more I’m pleased, Periwinkle, to send this impromptu to you in the post as you are understanding of these notes being of a sometimes haphazard and ill-put together nature. I always welcome your thoughtful and most often spot on assessment regarding their subject matter.
          First off, the temperatures in Missoula have been quite warm of late. Odd, really. Unseasonably so. Yesterday, one of the tenants in our building alluded to his golf game while we visited as I got off my bicycle to go into the office. It’s been in the sixties, for Pete’s sake. This should be the bomber time to be on the hill making laps. Hopefully the place will hang on through March. I wandered about the backyard yesterday cleaning up dog business while throwing Jonquil a few bumpers. We collected old tennis balls too which had been covered by the previous month’s snowfall and old birch leaves. While doing these things I took a gander along the rock wall and noticed the daffodils were starting their march forth, about an inch out of the ground already. Hardy little fellows, I’m certain they’ll have to endure numerous future snow accumulations. The weather’s been good news for soccer practice. Snow-on-the-Mountain attended a tourney in Spokane last weekend in which his local club had some success, and Rough Mule’s Ears has been practicing as well. Though at the moment, I am home with Rough Mule’s Ears who is a shade under the weather. Tulip had her first tennis practice yesterday, deciding take up the sport this spring. I would be remiss if I did not indicate the warm weather’s pull at me to get out the canoe and rod, giving things a whirl. It’s probably pretty productive at the moment, casting the small presentations. This, of course, would mean renewing my license. So, there you have things on the domestic front. Not too much new to report. Oh, Bitterroot continues in her diligent capacity maintaining the whole operation, including volunteering in the athletic department…
          Last night I spent part of the evening, after one Psych (a nifty little comedy) rerun with Tulip, watching a new show called Doc Martin. A retiree came by the shop yesterday and suggested it to me out of thin air. I alluded to the fact that I’ve not watched the tele in well over a year, though I’ve not been tracking the exact length of time. As I’ve mentioned in a few past notes, I still watch some of the soccer matches to attempt to remain current, and watch Psych reruns occasionally with the rascals, but other than that things are pretty quiet as they pertain to the television. Oh, and the Last of the Summer Wine reruns which play off of the laptop onto the Boob-tube. By the way, I’m reading Andrew Vine’s book, Last of the Summer Wine, The Story of the World’s Longest-Running Comedy Series (Aurum Press, 2010). Vine provides good insight into the nature of the program’s initiation and how things fell into place. Evidently the nature of casting such works outdoors was quite unique in the ’70’s and though a risk, took well with audiences. This has certainly been part of the appeal for me, the Pennines and the Yorkshire countryside. Vine allows the reader to glean understanding into the nature of Roy Clarke’s thought process and writing style, having spent formative time as a police officer in Rotherham developing an awareness of how people behave, human nature. This evidently spilled into his writing. Vine takes the reader into the working relationship between Clarke and James Gilbert, a senior BBC producer at the time. How the show’s name came about and the uncertainty of whether or not it would take. The reader learns about the characters. Clegg (Peter Sallis) is the solder (evidently reflecting most of Clarke) holding Compo (Bill Owen) and Blamire (Michael Bates) together. Evidently Bates and Owen did not share one another’s politics off the show either, though they buried the hatchet early on. Nora Batty’s origin is discussed, her immediate appeal and the fiery personality of actress Kathy Staff. It’s a good read for fans of the show. People maintaining a youthful perspective as they age, the gist of the matter.
          At any rate, I watched three Doc Martin episodes last night (and into this morning) – “Going Bodmin,” “Gentlemen Prefer” and Sh*t Happens.” I believe theses episodes first aired about a decade ago on ITV in the UK. It’s a bit too soon to provide you any insightful guidance as I’m completely new to the show and only tuned in as it was recommended by a long time aquaintance as mentioned above; however, the Cornwall scenery is outstanding and the characters are quite “British” – witty, humorous and unique. Doctor Martin Ellingham (Martin, played by actor Martin Clunes) goes through quite an environmental change, from that of a lofty London surgeon who learned at some point that blood was not for him (haemophobia), transforming to a more humble country GP. The community makes a rough start of it for Martin, especially after he correctly fires his incompetent assistant, Elaine, who through her errors placed the patients at risk. Ellingham yields to the town’s citizens who made being in the community somewhat uncomfortable for Martin unless he rehired Elaine, which he eventually does. The Doc seems a bit off driving his new Lexus through the rustic countryside to visit his Aunt, a lovely character who seems quite practical and down to earth, a voice of reason. The usual contemporary and age old themes are there, cancer, affection, water issues, depression, car wrecks, mail boxes, education, fitness and health, diet, obesity, beer, cigarettes, love, so forth… Additional characters include a depressed constable and an obese, smoking and drinking plumber whose son, a computer hack, does not want to go into the family plumbing practice. Doc plays a rather serious bird initially, but seems to soften as the story unfolds becoming a counselor as well as the local GP, typical of what happens in professional occupations, particularly in small communities. This seems to be aided by the character of Louisa Glasson, a grade school teacher with whom initially Martin got off on the wrong foot. The two form an attraction for one another in the initial three episodes mentioned above. I actually viewed these on an internet TV service. Each one streamed without hindrance, which has not always the case. The Last of the Summer Wine episodes are DVDs. I particularly like the sheepdog I believe) in Doc Martin, a stray I reckoned, which does not relent in its desire to work its way into Martin’s home and practice. Martin in one scene tosses a stick over a cliff to see if the dog will retrieve it. This follows the local constable having let the dog loose following Martin’s having taken it to the town’s police headquarters. As the two of us fully realize, dogs are like that for some reason, Periwinkle. The dog must see beyond what has thus far been revealed about Doc’s character. It appears the show has foreign adaptations in Berlin and in the Tirol region of Austria as well. Should I stay with it, we might bounce a few laughs between us if you tune in as well.
          For the last bit in TV land I’ll simply note that Snow-on-the-Mountain is quite into the latest adaptation of Sherlock Holmes, the BBC series Sherlock. He enjoys the series so much he had me order the hardback of Sir Arthur Conan Doyle’s complete works. This is always encouraging, Periwinkle. Bitterroot is quite into House of Cards, which you’ve probably tuned into as it seems to be rather in vogue at the moment. I’ve only watched the first couple of Sherlock episodes and not one of the House of Cards shows. Therefore, I’ll not elaborate on these two programs, but leave them only as a note on the present goings on about the place.
          One of the reasons I wanted to write to you was to see if you caught David Schambaugh’s article, The Coming Chinese Crackup (WSJ, 7 March 2015 in the Review Section). We dropped the ball on revisiting Rosen’s work, which we still should do. It’s amazing what can occur in a relatively short period of time. The one take on Schambaugh’s article that resonated was the emigration issue. This is disconcerting as it may be indicative of a power struggle that is occurring within the country, not simply related to the corruption crackdown. Many citizens who would attempt to drive meaningful reforms may be leaving. This of course is not new, but if the trend is accelerating it is a concern. I agree with Schambaugh’s take that Xi is not keen on making the same errors he believes Gorbachev made in the Soviet Union. This is well known and taught. I believe Schambaugh’s criticism of Xi’s economic reforms arising from the Third Plenum “sputtering on the launchpad” are a tad off base. Reforms are occurring. They, however, are not going to be able to be hastily implemented. Consider the obvious in this regard given the magnitude of the program, the size of the country and the desire to maintain some form of stability during the disruption. John Authers’s article on 2/5/2015 in the FT, US Economic Health remains vulnerable to the China syndrome, was of interest as he looks at other measures to break through the typical issue of China’s lack of transparency regarding its economic stats, citing the country’s “electricity output being negative for the first time since 2009.” I don’t know, maybe I’m snowed on this one, but it would sync with a changing real estate environment, a commodities slow down and issues such as excess capacity in their steel sector. China’s economic growth has slowed, this is clear. Real-estate prices continue declining and thus far this year the purchasing managers index has been below 50. Banyan in his latest weekly write up in the Economist (7 March 2015, page 45), Comprehensive Education, also takes Xi to task for not more rapidly moving the “Four Comprehensives” along. Specifically noting the items of Building a Moderately Prosperous Society, Rule of Law and Pollution as reform laggards. Much flowing from the first item according to the article. Again, things move slower in the region. PPI has hit a rough patch, dropping 4.8% in the latest reading while the Chinese CPI went the other way, up in February 1.4 on-the-year. Excess capacity remains an issue for the country and politically this is a sensitive one to deal with, closing plants. For a somewhat different slant on the recent negative labor release, see IBT’s China’s Strong Labor market means no Extraordinary Stimulus by Boby Michael (3/9/2015, International Business Times) which states “Moodys noted that Li (Premier Li Keqiang) has maintained in his address to the Congress (presently going 12th National People’s Congress) that last year’s urban job creations target of about 10 million, following the actual generation of 13.2 million new positions in China’s cities in 2014.” The article also notes Moody’s take that China taking its growth rate down to 7 is a “credit positive” as it may indicate the country is not willing to employ excessive leverage to continue to gun growth. The jobs migration issue to me is the most significant issue facing the country. If this goes smoothly, continued gradual economic reforms will possibly encourage cracks in the communist political system. If the economy slows dramatically, or capacity is not handled properly, it is unclear how matters in China will politically get resolved. Constructive liberal economic policy and growth will encourage political liberalization, deep recession, on the other hand, possibly further repression. How I remain on the issue. Lastly, a Forbes article by Stephen Harner, Why David Shambaugh’s ‘Coming Chinese Crackdown is Wrong, provides a further contrarian take to Shambaugh’s analysis. Harner writes, “Let me say here. Anyone who visits for long intervals or lives in China …. knows that a sense of dramatic, almost revolutionary, change now permeates the air.” Harner’s take on Xi renewing Confucius moral traditions is of interest and how this is perceived outside of China.
          Well, the good news today is that Yellen indicated that removing “patient” from the script is just around the bend. The only negative I find in such sentiment might be how much higher can the dollar go? This is no small issue. The emerging economies, our customers, have been taking a beating with their currencies relative to the dollar, seeing significant declines. This is now showing up in our trade numbers. The equity markets today were none too excited, yet, that’s to be expected in a sense and things have gotten a touch frothy in certain areas; a result of low US rates. I read an article today discussing that folks were not to be concerned, the ECB will be able to find sovereign bonds to purchase for its 60 or so billion Euros per month. This is disconcerting and I spent some time trying to dig up another article I read somewhere alluding to how out of whack Japanese government bond markets have become given what is transpiring there. At some point in the past I wrote “is anything true anymore?” You might recall the remark. The issue is markets are not functioning rationally globally. Sorry, but when you see negative yields in so many markets, one has to perk up and take notice. This is what happens, I believe, when committees of bureaucrats and policy makers intervene deeply in fixed income markets. Part of the buying in the private sector may reflect fear, but things are principally being driven out of whack by the monetary policy programs to save overly indebted states. I did not read the editorial, but evidently Rubin took the legislative branch to task for not acting while the economy has been growing. When are the cuts going to occur? Should a country, pick an establish one, cut spending and raise taxes when the economy is in recession? That does not make much sense to me. For their take on this matter, I admire the Cameron government for sticking with their fiscally responsible guns. I also admire Cameron’s government’s take regarding an EU Army. The UK, according to the PM, would be out on that one. Rightly so. I see that Schauble is being candid with the German citizenry that Germany will see increases in defense outlays. This is being put on the Ukraine incident; however, I believe whatever the cause, it will be constructive for Euro states to increase their defense spending in order that the US can allow Western Europe to principally provide their own defense and therefore over time allow the US an uneventful Nato exit. This is appealing for the economic savings, particularly as we are so engaged in so many other places. This is a subject for another letter, though. Wrapping up on the economy, the employment situation here appears to be continuing its improvement. Even if the participation rate is off, one would expect changes in the wage data to start surfacing. Yellen is right to change the language, hopefully, in my view, not too late. By the way, the language issue has to go. I remain a fan of no forward guidance, regardless of Canada’s experience thus far. Maybe a few rate notches up in the States will begin to present some semblance of a return to normalcy. The reality is, I’m afraid, rates will be moving up very slowly if at all this year. Too much attention being paid abroad, though understandably. I reckon we’ll see how the thinkers sort it out.
          Lastly, Periwinkle, I’ll close with a wonderful read I would like to encourage you to undertake – Gogol’s The Overcoat. It was subtle, but once I finished the short story it hit me full force. There’s so much there. What man strives for and why? How individuals in society behave towards their fellow human beings; particularly those in power. Gogol explores this deeply with government officials, but it can be seen in most larger organizations and bureaucracies. Large concentrations of power are often to be feared. This applies to syndicates and cartels, conglomerates, business supermarkets (if you will) – the one stop shop, the mega this and that. See the crisis of 08/09 through this lens. The world in the latter ’30s as well. Smaller is most often better for the community. Matters remain known, transparent and efficient. You’ll probably ask me after a read, “Are you sure you were not meaning Gogol’s play, The Government Inspector?” To this I would reply, a good read, but no. I picked up a sense of the above in the character of Akaky Akakievich, a regular Joe who lived a modest life and socked away part of his income along the way. I’m not going to ruin it for you. Read it yourself if you’ve not already. Sometimes, one only needs a light aesthetic touch to trigger vast emotions. Turgenev, in a compilation of his letters in Letters A Selection Edited…by Edgar H. Lehrman (Alfred A. Knopf 1960, pp. 39-41), writes to the Viardots “A very great misfortune has struck us: Gogol died in Moscow, died after burning everything – everything – the second volume of Dead Souls, a host of finished works… He was more than a mere writer to us: He revealed to us ourselves…” A letter following – “… Let me begin by telling you I have not left St. Petersburg for a month – much against my wish. I am under arrest at a police station, by order of the Emperor, for having had an article – some lines on Gogol’s death – printed in a Moscow newspaper…. I am not complaining about the Emperor… In two weeks they will send me to the countryside…” Which is of course where Turgenev soon found himself. I only include this because you know how I feel about Turgenev and I thought you’d find of interest his take on Gogol. I have not read Dead Souls though I just got a used copy which I’ll probably go through shortly.
          When you get a moment, send along your thoughts. Snow-on-the-Mountain jabbed me this evening to ask if we might slip out tomorrow following school to wet a few flies, should this weather hold. If that’s the case, I’ll give you a report on the day. Until then, I have the honor to be, Sir your most humble and obedient servant,

Tetraneuris

An Afternoon in Greenough

22 December 2014

Periwinkle,

          It’s early Monday morning. Outside it’s quite dark, yesterday having marked the solstice. Today begins the long march to spring. I wonder, Periwinkle, How will it go for the daffodils this spring? Tannhauser is blending into the background, playing forth from the laptop’s small speakers. I’m quietly asking myself, Should I go outside and salt the walk again or not this morning? It’s been treacherous on the hill lately with a combination of mainly rain and freezing rain. Cycling down to the office later this morning may be interesting. Yesterday Jonquil chewed up my mouth guard. I’d left it on an old stack of hardbacks on the nightstand. Why does one grind his teeth in the night? Why is such a simple item so expensive? The molars made it through the night, regardless.
          Yesterday Tulip asked if we might go for a hike. This always being an opportunity to spend quality time, I of course obliged. It had first been determined to make our way down to the university campus and then walk up the Clark Fork along the Kim Williams bank, formerly the old rail bed; however, we happened upon an event occurring at the university’s center and hence changed plans, deciding to cross the river and hike into the lower Rattlesnake along the well established trail system in Greenough Park. Tulip, now having her license, has been working on her driving skills. This is going quite well. Eventually she found an area in the lower neighborhood to park, not too far from her old dry land training area when she was on the ski racing circuit. “I like this area anyway. We used to run through here,” she said following our having discussed the need make other plans. It was lightly raining with significant overcast. There was a slight breeze. Once out and about we realized it was a bit colder than we had surmised while crossing through town.
          Lower Rattlesnake Creek, just above the small stream’s mouth, as you know, Periwinkle, winds its way south through the neighborhood north of town. A lovely little drainage and Missoula original water source, it originates in a designated wilderness south of the Mission Range (another sublime region) abutting the Flathead Indian Reservation. The water, as it tranquilly flowed along below us, contained a slight discoloration and was somewhat up for this time of year. This a result of the recent moisture. We walked by a waste bag pole with its small box resting above two garbage cans with heavy metal lids. The lids were tightly closed to keep out the local black bears, now most likely in hibernation. I pulled out a few plastic sheets for Jonquil, just in case. As we walked along, the Missoula community was active in the area. People tightly clad in their lycra exercise attire were jogging and walking along, coupled with their dogs and children. One child came by on a small tricycle with training wheels. “What is that?” Tulip asked, observing a small grey stone shed like structure which had the appearance of a small jail cell. “I’ve never inquired, but it’s old,” I believe I replied. I found myself glancing at the small green markers below the stands along the bank, one for a Dogwood tree, another for a small Service Berry. “I love it here, but sometimes think of the old hardwoods where I grew up,” I said noting the grey cloud of my breath as I looked into the trees, mostly large Ponderosas below the homes on the small shelf above us. This spilled into a conversation, mostly me reminiscing, about the old neighborhood, Periwinkle. You were never quite into the nuts, but I recall your fondness of the colors in the fall and the simple days of frolicking below the great stands, instinctively enjoying their cover. I discussed the old neighborhood’s Hickories. My collecting the nuts, cracking them and painstakingly using a small metal pick to get at their delicate meat. Sometimes simply smashing them with large rocks and scrounging up what was left. What a grand tree, the Hickory. Hickories were hell on chainsaws though. I recall one having fallen on an aunt’s roof and having to be removed. Do you remember that? The vices and how many some of the larger blocks took to finally give? Also, the stands of Chestnuts below the old place in another neighbor’s yard.
         “Do you recall the sea urchins?” I asked Tulip as we walked through the wet suburb, thinking of our family times in the ocean snorkeling. It took a little thinking, but somehow alluding to a porcupine brought back the memories of the black, spiny creatures in the sea. “When not much younger than yourself, I used to climb into the neighbor’s Chestnut trees and pick the nuts. They were difficult to open at as they were encased in a spiny like armor which resembled the sea creature, only green and a bit smaller. Once the outer material was removed, I would cut open the thin brown shell and eat the raw yellow meat,” I continued as we walked along in the rain. “Don’t most people roast Chestnuts?” she correctly noted. “Yes, and boil them as well which makes removing the shells easier. I recall around this time of year when quite young peeling the recently boiled hot cases from the nuts so that they could be cooked in various holiday recipes. I can’t recall others who would eat them raw, but I did. Only so many though, as the stomach could only take so much.” Great old neighborhood, Periwinkle.
          The three of us made our way to a section where we had to either go up onto a main Rattlesnake artery, West Greenough Drive, or cross over a small bridge above the creek to the east, among neighborhood homes. In a slight drizzle, we opted to go across the bridge, though I realized there was not a connector trail going north and we’d have to take a road up briefly once we crossed. After crossing the bridge, Jonquil sniffing everything as dogs will, we came across two beautiful yellow labradors with a man who was standing at a restrained intersection to the south. “Hello there,” I offered in a loud voice as we approached. I don’t recall a reaction, though maybe a hello or brief nod as well. I do recall the intense expression, however. The two labs were unleashed and minding their own affairs as we walked through continuing east. For some reason, I decided to turn around and walk back thinking the Greenough road had always been the usual route and why should this time be any different. Crossing back through the intersection, the fellow stated that the dogs belonged to the neighbors in the area and were not his. His features now becoming more apparent, though he was wearing cold weather attire and a cap. As we continued through, he offered in a firm direct voice, “It ends!” I looked directly at the gentleman, trying to recall where I’d seen or met him prior. His commanding expression, those two words, almost a yell. “What?” I believe I asked, perplexed? “It ends,” the voice echoed resolutely again. There are moments where one thinks of a thousand responses in a matter of seconds and I had many, but I simply went with, “I’ll believe it when I see it.” We continued walking and I still could not make the connection of how I knew this fellow. We avoided a large puddle prior to once more crossing the bridge. A man jogged past, part of his body remaining in the brush along the path’s edge to avoid us and the puddle. Later in the evening, it came to me how I recognized the man we’d seen. One day riding up the Sheep Mountain trail, an old haunt, we crossed one another, climbing just below the last drop off to the Three Pines junction. That day too he was quite determined, pulling hard on the bars while climbing. There was no response when I commented to the elder gentleman, “nice work,” as I quietly passed. Above the junction (where there’s always a nice Huckleberry patch late in the summer), a large Ponderosa was across the trail. I decided to turn around. Coming down, I rode by him again as he continued to ascend. That expression, dogged and serious, almost terrifying.
          Following this we trekked by a lady with her dog. Jonquil behaved. We then took West Greenough Drive to Lolo, crossing over another bridge above the quiet stream and then back onto the ice covered trail not far north of the bridge. Prior to the bridge, we passed a late friend’s condo. A cancer victim. This weighed on me as we walked. At some point the conversation turned to contemporary events and we found ourselves discussing medicine and the health industry’s astronomical costs. This chat had first initiated, I believe, a bit earlier when we had crossed below the mother’s home of a fellow with whom I occasionally duck hunted. He stored his boat and decoys there. One of our former waterfowling party having been in the medical field, now retired. It’s been a great while since we’ve been waterfowling, Periwinkle. The urge to do so having waned similar to the pursuit of big game. Maybe as we get older, these things become less important. The experience of recreating in the outdoors, principally armed with a camera, accomplishes the important attributes of educating youth in nature.
          At any rate, we took up the conversation again. “Were there not insurance entities involved in the equation, great third party payors, expenses would most likely be dramatically lower,” I suggested as we walked along, noting the still evident yellow and brown leaves encased in the ice above the trail below our footsteps; their former lifeblood still standing above, grey and bare as Cottonwoods appear in the winter rain. “Imagine a world where there were no insurance firms or, more importantly, governmental bodies such as Medicare and Medicaid paying one’s medical expenses. Might the fees charged for procedures drop? Might people try to take better care of themselves? Might unnecessary visits decline? What is needed is emphasis on preventative care, Tulip. Taking care of one’s self along the journey,” I continued to the somewhat perplexed ears nearby. “But, if there’s no insurance, won’t only the wealthy be able to afford services?” I, of course, knew this was on the way. “Costs as a whole are sure to decline were there no significant third party payors. In the short-term, it may be the case that costs remain elevated; however, over time competition would work its way into the industry and there would be adaptation and lower prices. One risk might be that health care and medical innovation declines; yet, never underestimate the profit motive which along with the non-profit research tanks, would probably continue to drive the development of new advances. Patents, Tulip, are another industry dilemma. Often significantly too long, are patents. Further, I do not feel that it should be the realm of colleges and universities to expend their resources on medical research. This should be done in “outside” private or non-profit research tanks. Perhaps the academics/scientists can find employment in both arenas. Academia should pertain to educating pupils, not getting government grants. The same goes for athletics, Tulip. This should be an outside club matter of some sort, not within the campus environment. Perhaps at younger levels in some municipal or non-profit capacity as is the case in parts of Europe. I realize we’ve discussed this before…” I went on.
          At this point, Periwinkle, Jonquil was pulling hard on the lead and I found myself sliding on the wet ice along the creek. “We should invest in those chains that go on the base of shoes similar to those applied to waders,” I suggested as we skated along. We dipped down to the water’s edge allowing the dog to get a drink and play in the creek. Jonquil’s panting cast a light grey mist which quickly disappeared above the water’s muted green flow. “If you are paying five hundred or a thousand dollars a month for your insurance coverage, might you be more inclined to ‘get your money’s worth,’ Tulip? Might you say, ‘it’s not really a significant condition, but I think I’ll go in anyway.’ I’ve nothing against insurance firms, Tulip. The truth is that were it a truly unregulated industry, there would be more firms and more competition driving down premiums; however, regulations, firms are mainly regulated at the state level, have greatly impaired the industry’s ability to properly function. It is overly protected in this sense. Further, the fact that firms and government agencies are willing to pay hundreds of thousands of dollars for procedures and/or meds has perpetuated the present crisis. Ask yourself, Who are the beneficiaries of these monies? This is always where to begin, Tulip. Were there no middle entities, these astronomical expenses may well be significantly lower. So, what has been the chosen course to attempt to remedy the industry?” I continued expounding, Periwinkle. Someone was spending her time now looking up into the trees as we walked along. It’s a bit surprising she enjoys the walks, but that seems to be the case. “The path taken has been to mandate one to have insurance coverage. This, like many things of late, is being imposed at the federal level, Tulip. A continued Western trot towards centralized planning, the modern methodology to remedy perceived economic failures, ailments if you will, Tulip. A committee somewhere will make decisions for you, my dear girl, that in the future you will be unable to make yourself. The new law, as put forth by the present Administration, requires that the country’s citizens purchase insurance. Does this infringe on the US Constitution? Yes, Tulip, of course it does. Once more, ask yourself, Who benefits?” There was no answer. “What about those with preexisting conditions?” I can hear some exclaiming, Periwinkle. Again, where there no third parties, costs should decline.
         “The hospitals and medical providers state that many of their customers are not able to pay for their visits and therefore costs are being passed on in the form of more expensive services and ever rising monthly premiums to those who are able to pay. Thus, so the argument goes, might it not be better to simply mandate that coverage be had by all? Thereby increasing the pool which should spread the burden, lowering overall costs. Well, this of course places the emphasis on the young and healthy to provide an economic base to buttress the new government mandated system, right? Why, of course, Tulip! This can also be thought of as a tax, you see. After all, why shouldn’t the healthy suck it up? Those who have taken care of themselves subsidize the carefree. A societal act of good will,” I went on… perhaps getting a bit carried away, Periwinkle; but, she was, I believe, getting it. “It does not take a great deal of creativity to see where this is going with life expectancies continuing to expand, right Tulip? After all, these new hundred thousand dollar medicines and procedures are allowing folks to live into their eighties and nineties, right? It is true, of course, that many of the county’s younger generations are already saddled with the costs of student loans, lasting for perhaps decades into their futures. Readily available government liquidity lubricating higher education. This indebtedness (should one go to college, a separate subject) being the case while one also attempts to save for her home purchase and raise the family’s children. If one happens to be self employed, she’s paying almost fifteen percent of a large chunk of her income into Social Security and Medicare whilst at the same time paying high federal, state, local and property taxes. Does this make you want to go charge the world, Tulip? Take big risks to start that Tire business we once discussed? Maybe a small tech consulting concern? I’m sure the thirty and forty age set can handle it, right? Maybe the Millennials as well?”
          So the conversation went, Periwinkle. Government always seems incentivized to perpetuate itself. Solve the peoples’ problems for the people rather than allowing individuals to act in their own interest. How does this train stop? It was the standard jargon, but I believe she caught some of it. Upon hearing its familiar screech, the two of us looked high up through the light rain into the top of a dark Cottonwood. There, perched on high, was a large falcon. The great bird was stately like, observing all activity below its position. We at this point also happened to be standing above Mr. Bugbee’s plaque, which cites an apt quote of his pertaining to nature’s educational value. How are there going to be proper resolutions for the above ill policies? Time and nature will most likely have to work her course. This is unfolding more rapidly in other parts of the world at the moment. You, of course, are aware of these matters.
          A last item, Periwinkle. I’ve decided to read Dostoevsky’s Crime and Punishment over the holiday break. Why not? Thus far (I’m only half way through the work), it encompasses his traditional themes of how one’s environment may influence one’s actions. Certain characters epitomize what Dostoevsky describes as “unfortunates” in his other philosophical writings. The book probes impoverishment and the ill effects of excessive alcohol consumption on a society. In Dostoevsky’s A Writer’s Diary, he castigates the “unfortunate” ideology and implores one to rise above his environment (should it be an ill one), rather than allowing it to sink one further into its dregs.
          Happy New Year, Periwinkle. I hope to hear from you in good order and have the honor to be, Sir your most humble and obedient servant,

Tetraneuris