Profit is a clean word

In the profit-making world, there is much greater monitoring of the behavior of people who act for the organization. Profit-making organizations have a financial bottom line they must meet, or sooner or later, heads will roll. Not so with nonprofits, who have no bottom line to meet. On top of that, incompetence for nonprofits means bigger budgets, higher pay and less oversight. That description aptly fits one the nation's largest nonprofit organizations – the public education establishment.

Profit is vital to human well-being. Profit is the payment to entrepreneurs just as wages are payments to labor, interest to capital and rent to land. In order to earn profits in free markets, entrepreneurs must identify and satisfy human wants and do so in a way that economizes on society's scarce resources.

Here's a little test. Which entities produce greater customer satisfaction: for-profit enterprises such as supermarkets, computer makers and clothing stores, or nonprofit entities such as public schools, post offices and motor vehicle departments? I'm guessing you'll answer the former. Their survival depends on pleasing customers. Nonprofits, such as public schools, post offices and motor vehicle departments, survival depends mostly on pleasing politicians.

When a firm fails to please its customers and thereby fails to earn a profit, it goes bankrupt, making those resources available to another who might do better. That's unless government steps in to bail it out. Bailouts permit a business to continue doing a poor job of pleasing customers and husbanding resources. 

Government-owned nonprofit entities are immune to the ruthless market discipline of being forced to please customers. The same can be said of businesses that receive government handouts.

It's this ruthlessness of market discipline that forces firms to please customers, economize on resources and thereby earn profits or go out of business and goes a long way toward explaining hostility toward free market capitalism. And much of the hostility toward free market capitalism is held by businessmen. Adam Smith recognized this in his "Wealth of Nations" when he said, "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices." Their co-conspirator is always government.

You have no rights: No Law? No Warrant? No Problem!

The era of personal liberty is over. One of the great scam going is the government promoted notion that your 'freedoms' are protected by the very institution that removes your freedom. Governments do not provides rights and freedoms. You are born with those.

Pro Libertate: No Law? No Warrant? No Problem!

The scam of 'recovery'

If you had asked me when I was a lowly college student if I ever thought that some day I would be reading a crystal ball for a living I would have switched majors to art or engineering. Yet here I am forced to read between the lines of the minutes of the Fed Open Market Committee's meeting today which is a bit like gazing into a crystal ball.

Here is today's big news from the Fed (with my emphasis added). Notice the murky language:

Information received since the Federal Open Market Committee met in August indicates that the pace of recovery in output and employment has slowed in recent months. Household spending is increasing gradually [but not recently], butremains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. Housing starts are at a depressed level. Bank lending has continued to contract, but at a reduced rate in recent months. The Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be modest in the near term.
Measures of underlying inflation are currently at levels somewhat below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability. With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to remain subdued for some time before rising to levels the Committee considers consistent with its mandate.
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period. The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings.
The Committee will continue to monitor the economic outlook and financial developments and is prepared to provideadditional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.

Yikes, where is the good news? There isn't any, as I pointed out yesterday ("Money Credit and Recovery"). Talking about a glass half full; they sound like me.

The only thing new today from the Fed is that they still don't know what to do. They are waiting for things to get better, quickly. If not, they will roll out the quantitative easing (QE) and start monetizing more federal debt. I have written about this extensively (here,here, here, here, and here). My guess is that they will react strongly to falling economic indicators, especially a rise in unemployment, and they will engage in substantial QE. The result will be stagflation. One thing to note is in yesterday's article I pointed out that money supply (TMS1-2) is starting to grow. This indicates inflation.

The scam of 'market failure'

Americans are programmed to believe any economic crisis is a result of 'market failure'.  This mantra is useful for the scam-promoting culture of government.  Every economic catastrophe is, and has been since 1913, a direct result of government meddling with the money supply and the economy.  The belief of a centrally-managed and regulated economy and financial system is one of the most promoted and believed scams around.

With each crisis and problem created by government, they step forward to solve it, to 'save you', to 'do something'.  This results is only two outcomes: 1.  Loss of liberty and 2.  more problems.

This article is a superb assessment of the shift taking place right now:

The Great Divergence: Private Investment and Government Power in the Present Crisis

The Wild West was not Wild.

Our cultural stereotypes are a scam as well.  We are taught 'law and order' is required for civilization and that means, of course, we need a government. (Governments are nothing more than a group claiming the legal right to use lethal violence)

This article is an excellent example contrarian thinking on the 'Wild West' and presents more evidence in the case against the scam of government.

The Culture of Violence in the American West: Myth versus Reality