Boundless Absurdity, thy name is Bureaucracy

Richard Karn

Managing Editor The Emerging Trends Report

"One of the great mistakes is to judge policies and programs by their intentions rather than their results.“--Milton Friedman

The Gold Symposium/October 2012

The Problem with Bureaucracy Summed Up

Pythagora’s Theorum: 24 words

The Lord’s Prayer: 66 words

Archimedes Principle: 67 words

The Ten Commandments: 179 words

The Gettysberg Address: 286 words

The US Declaration of Independence: 1,300 words

The US Constitution w/all 27 Amendments: 7,818 words

EU regulations on the sale of cabbage: 26,911 words

... the US Tax Code (85,000 pages and growing annually)

Source: Ivar Cracker, 2011/Karn 2012

"Global Visual and Material Culture, Prehistory to 1800.“ (CAN)

“OCAD University in Toronto, Canada has created and required its students to purchase a $180 art textbook entirely devoid of pictures of any type. Students who purchase the book are instead given access to a web resource for viewing the art that should have appeared on the book's pages.” Source: Yahoo News/Today in Tech

Ice Cream (USA)

NJ PTA sold ice cream Fridays during lunch to fund field trips and other school expenses, and teachers used promise of a free ice cream as an incentive

Now accused of violating laws prohibiting fundraising through the sale of food

during “hours when our school nutritional program is in operation.” Regulation school lunches are receiving such a negative reaction, students are

striking against the USDA guidelines and the food they are being forced to eat. Schools are planning to install cameras inside lunchroom trash cans to document

all the wasted food they are forced to serve but which no one seems to eat.

Source: http://www.westernjournalism.com/regulators-force-pta-to-cancel-fundraising-event/

Best Friends (UK)

Schools are adopting “Best-friend Bans”

Ostensibly “to save the

child the pain of a break up from their best friend”

Instead, children are

encouraged to play in large groups

Source: The Sun, March 2012

Garage Sales (USA) 45,000 garage sales held every weekend in the

US

The Consumer Product Safety Commission has extended its control to the resale of any product ever banned for any reason to ‘any resale event’

Must consult 24-page booklet and go through long list of banned goods for resale on the CPSC website

“Violators caught selling anything on the enormous list face fines of up to $100,000 per infraction and up to $15 million for a related series of infractions.”

Many states now require those wishing to have a garage sale apply in advance, pay for a permit, and adhere to strict guidelines about what they can and can’t do

Some states, such as LA, no longer allow people to purchase used goods with cash—vendors, including garage sales, thrift shops, flea markets, church bazaars must all either accept personal checks or process credit/cash cards

Water (EU)

Source: Williams Inference Service, September 2012

After 3 years of deliberation, 21 EU scientists have decided that WATER DOES NOT PREVENT DEHYDRATION—or at least that bottled water manufacturers could not claim it does. ...and face a 2-year jail sentence if they do.

Wind Energy (USA)

“The United States Attorney in North Dakota has charged seven oil companies in seven separate cases with violation of the Migratory Bird Treaty Act for the illegal killing of 28 migratory birds.

The American Bird Conservancy says that the wind industry, despite killing more than 400,000 birds annually, has yet to face a single charge.

With an anticipated twelve-fold wind energy build-out by the year 2030, the Fish and Wildlife Service (FWS) estimated bird mortality is expected to dramatically increase in the coming years, absent significant changes in the way wind farms are sited and operated.”

Source: Energy Biz Nov, 2011

“The addition and withdrawal of intermittent electrical generation to the grid, such as that from solar and especially wind, have contributed to the decline in the reliability of the North American electrical grid.”

Volt (USA)

Government Motors (GM) Business Model:

Build Cost: $76,000 - $88,000

List Price: $39,995 - $49,995 Profit/(loss) ( $36,005) – ($38,005) on each vehicle sold

... less $7500 Federal rebate

... now offering a $169/month finance deal (for >40 years?) ... or a 2-year lease at $165-199/month (hmmm...drive an $88k car for 2 years for <$5k...) Source: Reuters

...and are they even ‘green?’

Other US government-run businesses: Medicare, Social Security, AMTRAC, US Postal Service, Fannie Mae, Freddie Mac...

Medicare: 55 years of government oversight

So...

...let’s create a whole new bureaucracy!

“Let’s get this straight: “We're going to be gifted with a healthcare plan we are forced to purchase

and will be fined if we don't, which purportedly covers 10 million more people without providing for one new doctor but provides for 16,000 new IRS agents, written by a committee whose chairman says he doesn't understand it, passed by a Congress that didn't read it but exempted themselves from it and signed by a president who smokes, with funding administered by a Treasury chief who didn't pay his taxes, for which we will be taxed for four years before any benefits take effect, by a government that has already bankrupted Social Security and Medicare, all to be overseen by a Surgeon General who is obese, and financed by a country that's broke.

“So what could possibly go wrong?”

Source: Dr. Barbara Bellar, candidate for Illinois state senate

Ethanol (USA)

• $40b in gov’t subsidies to date

• The Environmental Working Group (+5) stated in 2007 subsidies “for corn-based ethanol have produced unintended, yet potentially catastrophic, environmental consequences, with little or no return to taxpayers in energy security (or) protection from global warming.”

• EROEI is no longer debated—it’s negative

• Increase mix from 5% to 10%; then in 2012 to 15%

"If you look at the peer reviewed scientific literature, the debate is over.“ Al Gore, 2008

Question is, who is paying for the ‘peer reviewed scientific literature?’

Anthropogenic Global Warming (US/UK/EU/Aus)

“There will be 50 million climate refugees by 2010 from rising sea levels” (removed from IPCC website in March 2011)

Bovine flatulence emits more CO2 than automobile exhaust, so we should adopt a healthy vegetarian lifestyle

Source: Met Office Hadley Centre/ Climate Research Unit, Univ of East Anglia

“The figures reveal that from the beginning of 1997 until August 2012 there was no discernible rise in aggregate global temperatures. “Since 1880, when worldwide industrialisation began to gather pace and reliable statistics were first collected on a global scale, the world has warmed by 0.75 degrees Celsius.”—Met Office quoted in The Daily Mail, 13.10.2012

“Toilet worms trauma fear” (NZ) “Wellington: A New Zealander who invented a toilet that used

worms to produce compost had to prove the worms were not being traumatized before authorities would approve his product.

An Auckland Regional Council official told Coll Bell to get an expert’s report on the psychological impact on the worms. “She felt that the worms were being unfairly treated and that it could affect them in a psychological way,” Mr. Bell said.

He said his ‘wormorator’ was finally approved after a vermiculture expert reported the worms were in excellent health and breeding happily.”

Source: The Daily Telegraph, pp 13, 17.12.2007

Bureaucrats’ Credos “Do as I say, not as I do” a) US Congress voting on bills they haven’t read—but exempt themselves

from nonetheless: Obamacare , Social Security and Medicare b) ‘morally bound’ to pass a bill to prohibit Congressmen and Senators

from profiting from the ‘insider’ information afforded them by their positions...in the Spring of 2012

c) “The three major US banks (have) apparently shifted over $250 trillion

of derivatives to their depositary units last year, which of course are guaranteed by the government”—Bloomberg, Bert Dohman/Wellington Letter, 20.06.2012

“More of the same, only harder” a) monetary policy: Greenspan put, QE-1, QE-2, QE-3... b) Volt c) ethanol

A Couple Key Considerations • A fiat currency regime (FCR) enables insanity:

– Rampant corruption – Military adventurism – Loss of purchasing power – Bureaucratic growth and excess

• All authoritarian governments promise utopia but use FCRs to suppress and control their populations

• Free markets expose and punish waste, inefficiency and mismanagement of centrally planned economies, hence the push for a global government, distributing misery evenly

• “History repeats because human nature doesn’t change”--Machiavelli

Global Pandemic of Corruption

The deficit doesn’t matter because for every debt there is a debtor for whom that debt constitutes and asset, so it all balances out in the end.

(akin to FDR’s ‘deficit spending is like borrowing from ourselves’)

Global Pandemic of Corruption

The deficit doesn’t matter because for every debt there is a debtor for whom that debt constitutes and asset, so it all balances out in the end.

(akin to FDR’s ‘deficit spending is like borrowing from ourselves’)

If it were the public buying gov’t debt with their savings, this might hold some truth; instead, the Fed is now purchasing as much as 70% of the US debt issuance.

With what? The Fed & US gov’t are counterfeiting money to buy up American assets—housing, banks, automobile manufacturers, etc—and we are headed toward a moment when the gov’t owns everything...and we will have become the Soviet Union without a revolution.

Governments’ Cut

The Price of Bureaucracy

Source: Bloomberg

2.2 million people in 4,575 prisons at cost of $57b/yr (vs $12b in '87)

...but for all of the bikers and pot smokers and drunk drivers and check kiters amongst our prison population, bankers, mortgage brokers and credit rating analysts appear to be statistically under-represented.

How sustainable is this? War on Poverty (‘60’s), War on Drugs (‘80’s), War on Terror (‘00’s) ...have actually

amounted to War on the Middle Class and Americans’ Civil Liberties

Since 1980, the US has created more than 160,000 laws but has repealed only 79

The number of US Federal government employees has doubled over the last decade and is now the largest union in the USA (14:1 tax receipts to pay each Fed employee salary—not including benefit package)

Even the experts can't agree on the total number of federal government agencies, commissions, and departments, but it is widely accepted that there are more 2000.

Small Business Administration (a government body): "regulations in general add $10,585 in costs per employee per year."

A $250,000 salary today is being termed ‘rich’ under the guidelines proposed for tax increases, but has the same purchasing power as $43, 754 in 1971 (BLS data)

By Q2/2011, the US had 107 million people receiving some form of welfare—not including Social Security or Medicare– up from 97 million in 2009...

WHO DO YOU THINK THEY ARE GOING TO VOTE FOR NEXT MONTH?

"Only in America could the rich people who pay 86% of all income taxes be accused of not paying their ‘fair share’ by people who don't pay any income taxes at all."

Peak Government

...Peak Government ...Thatcher Moment ...the end of the Welfare State

WARNING: this is not a real chart...

...however, the frequency between financial crises is growing shorter while the magnitude of each in dollar terms is growing larger

Global Pandemic of Corruption

Source: Barry Ritholtz

“There have been 269 stimulative policy initiatives announced around the world over the past 13 months.”-- International Strategy and Investment, September 2012

Fidel Castro: “The Cuban model doesn’t

work for us any more” (The Atlantic, 9/2010)

Western media either ignored the comment entirely or rushed in to say that didn’t mean communism didn’t work, just not in Cuba...

Castro, who was a Catholic taught by Jesuits, is now rumoured to be arranging dispensation to re-adopt the faith before he dies

Thank you