Monday, November 16, 2009

Paradise Awaits

Some economists attempt to separate the field into microeconomics and macroeconomics.

I am not one of these economists.

Nevertheless, it is important to understand an opposing argument, so I shall attempt to briefly explain the hypothetical theory behind the creation of these supposed types of economics for those readers whom are unfamiliar with such terminology.

Microeconomics is said to be concerned with households and firms.

Macroeconomics is said to be concerned with national, or regional, economies.

A common metaphor that illustrates the difference between the two fields is that while macroeconomics deals with “the forest,” microeconomics deals with “the trees.”

Although such a metaphor as thus provides a slight amount of clarity, it is important to note that “forests” do not actually exist apart from trees, and that forests are much more than trees to begin with. To be sure, one may understand a certain area of biological activity is a forest, but in order to truly understand a forest, one must actually study the various aspects of the forest itself! Forests are composed of numerous minerals, bacteria, fungi, plants, trees, insects, animals, rain, wind, moonlight, sunlight, etc. One could even break a forest down into molecular, and even atomic elements if they had the time, means, and desire to do so.

Similarly, there is no such thing as a “macroeconomy” in and of itself. A macroeconomy is a collection of individual households and firms: one could not truly learn about a macroeconomy without first understanding its individual components.

It was for this reason that gross domestic product (GDP) was theoretically conceived by macroeconomic central planners; GDP is, by definition (as hollow, and simple, as it may be), “a measurement of the total amount of goods and services produced annually in an economy.”

In other words, if a barber cuts someone’s hair, GDP should increase by the final amount of the haircut. If an engineer builds a bridge, GDP should increase by the final cost of the bridge. If a gold mine is discovered, GDP should increase by the final cost of the gold that is mined (the discovery itself may not necessarily produce any benefits).

Newspapers often reference GDP statistics when they assert the United States’ (if not the world’s) economy is either growing or shrinking. For instance, when new home sales are a large percentage of GDP one year, a subsequent downfall in new home sales the next year may shrink GDP if the prices/units of the other elements of GDP do not increase enough to offset the decline in home prices/units (which is what happened in the United States recently).

The rate of growth, or decline, of GDP over a period of time determines whether or not the economy is said to be in expansion, recession, stagnation, or depression. For many mainstream macroeconomists, even unemployment statistics are not necessarily a major indication of a healthy economy, which is why some have been bold enough to declare the current recession to be over, as GDP increased in the past quarter of the current year, even though unemployment increased.

In any case, there are two enormous problems with the concept of GDP statistics in practice.

The first problem is found in the basic accounting of GDP itself.

It difficult to ascertain how many resources are required in order for the government (the US Department of Commerce is responsible for GDP statistics) to accurately count all of the “final goods and services” of a macroeconomy as large as the United States in the first place.

In fact, the first problem does not matter a great deal, for the second problem is far more difficult to address.

Rhetorically speaking, how do unspecialized economists and accountants qualitatively understand so many unique goods and services after they have counted them?

After all, quality is very important: Toyota did not take over the automotive market simply by building cars—they built better cars for the money consumers were willing to pay!

Of course, the simple answer to the rhetorical question is that even the greatest geniuses among humankind would be unable to understand so many goods and services! Medical doctors must attend school longer than most economists; yet, there are far fewer economists than medical doctors in the world. And even medical doctors specialize in particular areas of study: brain surgeons are commonly thought to be the smartest medical doctors of them all, but one would be unlikely to find too many brain surgeons whom understand dermatology as well as most dermatologists!

The truth is that governmental calculators of GDP do not bother themselves too much learning about actual goods and services, much less the various techniques and processes microeconomic entities use: engineering, chemistry, physics, specialized labor, etc. These intellectual frauds only care about some goods and services people are willing to pay for in monetary units, and bureaucratic statisticians often manipulate the collection of the goods and services they supposedly measure in order that their selections will fit the “mathematical” percentages they wish to report.

GDP does not account for matters such as freely created software programs and/or charity; GDP fails to represent the value of students whom learn on their own from books rather than teachers; GDP fails to measure the entrance of formerly copyrighted books, music, and other forms of intellectual property into the public domain; and perhaps most humorously, GDP does not measure the value of new mathematical proofs, as mathematics does not have a great deal of monetary value directly, since mathematics in and of itself is not patentable, which is quite ironic, since most economists are absolutely infatuated with the subject. And even when GDP actually recognizes elements of the economy, GDP often severely understates inflation in certain industries, while it severely overstates deflation in other industries!

The real estate industry is heavily favored by GDP, while cutting-edge technologists are mostly left to fend for themselves. Of course, this may seem obvious today—given the fact that the recent real estate bubble left many Americans desolate—but even this bubble has not completely burst whatsoever, thanks to the assistance of the Federal Reserve and the United States government. Conversely, the technological investments of the 1990s have produced many real returns people were never expecting during the dot com monetary era; however, the simple fact of the matter is that the benefits of this technology have been ignored by most Americans in favor of complete nonsense according to their purchasing patterns, while the government itself cares very little about the glorious blessings our real intellectuals have bestowed upon us. Indeed, humanity often acts in this matter, as Galileo would surely explain to us if he were alive today.

To empirically prove conventional GDP is nonsense to the less enlightened mind, and to also prove that the recent real estate crash did not sink prices nearly enough, let us visually examine the growth of certain technology during the past twenty years, as humans often have a tendency to lose track of the past when it is not relatively recent.

Although computers were already in development well before the 1980s, I would like to show screenshots from video game consoles from the middle of this period until today in order to illustrate some of the technological growth that has occurred thus far, as graphics are much easier to comprehend than technical specifications.

Let us begin with the Nintendo Entertainment System, which was originally released in the United States in 1985.


Four years later, in 1989, the Sega Genesis came to America.



Sony would enter the home video game market in 1995 with the Playstation.



Microsoft followed Sony in 2001 by releasing the Xbox.



Today, current video game consoles consist of the Microsoft Xbox 360, the Sony Playstation 3, and the Nintendo Wii.




And not only are the graphical capabilities of these systems far superior to their recent predecessors, but today’s consoles possess online functionality, they can store thousands of songs on hard drives, and in the case of the Nintendo Wii especially—they have far more advanced controls. In fact, Microsoft is already working on a project that will even leapfrog the Wii’s controls, even though Nintendo has already made their own drastic upgrade in the form of Wii MotionPlus!

Furthermore, interestingly enough, even according to the consumer price index, which is a measure of inflation according to the US Department of Labor, the video games of today are even cheaper in terms of most ordinary consumer products than older games were for the original Nintendo Entertainment System! In other words, not only have video games increased enormously qualitatively, but one could trade in fewer cans of soup (if video games could be bought with soup) for an average modern game. If we used gold as a monetary measurement—especially today (as of November 14th, 2009)—we shall find that an ounce of gold can buy nearly three times as many video games as it could in 1985!

The main point that needs to be taken away from all of the above screenshots of video games, however, is that the video game industry is only a fragment of the technology industry as a whole!

Now, we can access the “morning” paper online (which is updated throughout the day and night), most of the magazines we used to pay for have more free internet content than they used to include in print only a few years ago, Wikipedia has virtually eliminated encyclopedia salesmen, we have video phones that are easy to use (barely anyone cares enough to try to use them), and we even have blogs where we can post ideas fairly easily for the entire world to view (like this one). Yet, all of the stuff in this paragraph alone almost entirely originated in the past ten years—once again—after the dot com bubble burst!

In the meantime, during the past twenty-five years, the average home has not changed a great deal in size, quality, energy efficiency, etc. As for undeveloped land itself—land has barely changed at all in only twenty-five years (unless a supernatural event occurred, such as Hurricane Katrina).

Imagine, for a moment, what would happen if the average video game designer became absolutely infatuated with procuring dollar bills. They would be able to create home designs far faster than the average architect: a $50 Xbox 360 game contains an enormous amount of virtual design—far more than the blueprints for the average home. Also, let us think what would occur if robots built standardized housing frames at more and more rapid rates every year. Pretend the chemists and physicists of Intel worked for a few years designing stronger and more geometrically sound skyscrapers rather than incomprehensibly small structures for microprocessors. If all of this were to occur, the real estate industry would completely collapse (in fact, the real estate industry will collapse sooner or later anyhow).

So, should we kill all of the economists for stealing the profits of these technological pioneers?

Certainly not.

But should we at least abolish the Federal Reserve?

What would be the point?

To even assert that the Federal Reserve needs to be abolished is to admit that they actually have real power and influence to begin with, but reality has already proven otherwise. If the computer industry continues to develop the way it has during the past twenty years, it will not be long before we live in a completely virtual world in tiny boxes in the real world stacked on top of one another.

As for Communism—the only people that are more ignorant, and unfortunately, more “powerful,” than mainstream macroeconomists are professional politicians. In case the reader has already forgotten, GDP is calculated by the U.S. Department of Commerce (more specifically, the U.S. Bureau of Economic Analysis), and the President of the United States is theoretically in charge of such. If the President of the United States does not even understand how the macroeconomic monetary system works, he certainly makes a poor philosopher king—to say the least of the matter.

President Obama is not a medical doctor either; yet, he believes he can fix health care. A common nutritionist has the solution to America’s health care woes—we need to stop eating junk food (smoking and unprotected sex do not help either).

Of course, when I said such people as professional politicians are powerful, once again, I was not speaking of true power; instead, these individuals have merely convinced themselves, and most unenlightened people, that they are as thus. The only thing more hysterical than a lawyer being in hypothetical control of a nation’s economy as complex as the United States is the idea that the average voter is wise enough to select the best individual for the job when they themselves are more than likely even more ignorant than their “leaders!”

It may be sad, or even blasphemous, for some people to admit this, but it is true—I personally find it to be funny.

Instead of feeling distraught, however, at the very least, one should, perhaps, feel an inclination to write plenty of thank you cards to all of the scientists, engineers, and real medical doctors whom have changed the world unknowingly, or unappreciatively, for all of us—they are true angels unto humanity.

Tuesday, February 3, 2009

High-speed Rail: A New Superhero

The United States’ economy is not nearly as capitalistic as most people believe. The recent automotive bailout is only a sliver of the truth, which is to say that the entire U.S. automotive industry has been a nationalized entity since the Eisenhower era—if not well before this time. At the very least, it is impossible to argue against the fact that the National Highway System has indirectly benefited auto manufacturers more than any public works project has benefited a private industry in history! Indeed, it is safe to say that automobiles would be a niche market in the world if it were not for the United States various governments’ insistence on building larger and larger roads.

Unfortunately for the American people, automobiles have never made much sense. Trains are far more efficient at carrying large amounts of cargo. Some government officials have finally begun to realize this simple truth. While not ideal, the California High Speed Rail Authority offers some interesting statistics: a 255 mile trip from Los Angeles to Fresno could be completed in 1 hour and 24 minutes by rail (at an average speed of approximately 182 mph); yet, it would cost less than the same trip in a car. [1]

Perhaps even more importantly, “In 41 years of high-speed train operation in Japan, there has not been a single passenger fatality, largely due to the separation of the rail line from roads and the myriad of safety features and operating procedures incorporated into the service.”[2]

The U.S. National Highway Traffic Safety Administration recently bragged on its web site, “New Data Showing Record Low Highway Fatalities!”

What’s this new record low?

Estimates show 31,110 people died on U.S. roads from Jan.-Oct., compared with 34,502 in 2007 during that same period.” [3]

And yet, we care so much about the relatively small number of people who died on September 11th?

What is more, even the proposed rail system for California is a travesty—it is a much better idea for the state than more highways/automobiles, but it is absolutely ridiculous how long construction of the service is expected to take. Even an “initial segment” of the system may not become operational until 8 to 11 years. Oddly enough, despite the fact that the California High Speed Rail Authority seems to be aware of the Japanese rail system, a simple search of Wikipedia will show that “Construction of the (Tōkaidō Shinkansen) line began on April 20, 1959 under JNR president Shinji Sogō and chief engineer Hideo Shima. It was completed in 1964, with the first train travelling from Tokyo to Shin-Ōsaka on October 1 of that year." [4]

In other words, the Japanese constructed a rail segment 40 years ago at almost twice the speed of the Californian construction proposal—of course, the modern train for California will be much faster, but then again, technology is also far more advanced today. A technical explanation would be far too long for this blog, but an even better abstract comparison may be the construction of the Union Pacific railroad in 1865. “The rails of the 'First Transcontinental Railroad' were joined on May 10, 1869, with the ceremonial driving of the 'Last Spike' at Promontory Summit, Utah, after track was laid over a 1,756 mile (2,826 km) gap between Sacramento and Omaha, Nebraska/Council Bluffs, Iowa in six years by the Union Pacific Railroad and Central Pacific Railroad.” [5]


References

1. http://www.cahighspeedrail.ca.gov/map.htm

2. http://www.cahighspeedrail.ca.gov/images/chsr/20080123171537_ImplementationPlan.pdf

3. http://www.nhtsa.dot.gov/

4. http://en.wikipedia.org/wiki/T%C5%8Dkaid%C5%8D_Shinkansen

5. http://en.wikipedia.org/wiki/Transcontinental_railway

Monday, January 26, 2009

Why Buy Government Bonds?

There is a common assumption that government bonds are safe assets during times of crises, but is there any logic behind this?

Today, the national debt stands at around $10,600,000,000,000.

While one could divide this number by the population of the United States in order to find each citizen's share of the burden, this would be incorrect from an economic standpoint, as children and the aged do not usually pay taxes. A much better number to divide the debt by would be the amount of the potential U.S. labor force, which even includes those whom are currently unemployed: in 2008, the labor force of the U.S. stood at 155.2 million.

Therefore, each citizen in the labor force owes about $68,387 to the government.

If you are purchasing government bonds today, you are betting that each citizen will pay you back your money through what is left over from their taxes.

And where do taxes come from?

The private sector.

If the economy is experiencing a recession, and if the private sector is in bad shape, there will be less federal tax revenues available to pay back government bonds.

How does the government fix this problem?

They issue more debt at a lower interest rate in order to pay back the old bonds.

The only reason the government can do this is because today's bond buyers are essentially dumber than yesterday's bond buyers: in other words, the government is a Ponzi scheme.

Unless the government issues bonds at a negative interest rate (it should be self-explanatory to a bond buyer why this would be a stupid investment since it would be better to hold onto cash), the principal of the national debt will still be higher, which will offset the lowered rates. In other words, the taxpayers will still owe more money.

One could think of it this way: if an individual takes out a loan for $10 at a 10% rate for one year, they are essentially obligated to pay their lender $11 back at the end of the year. If the individual can not pay the $11 loan back at the end of the year, they could borrow another $11 in a year, but even if they can convince a new lender that they should only be given a 5% rate, they will now owe $11.55 at the end of the second year! In other words, the second lender is essentially dumber than the first lender, because they offered a lower rate to an individual that failed to pay their debt on time; what's more, there is even greater risk involved on the newer lender's behalf, since the borrower must pay even more money back at the end of the year.

The only reason an even newer lender might accept such a scenario the third year may be because they believe an even dumber lender is going to come along the fourth year, but the scheme is mathematically doomed to end when the interest rate is below -100%, and/or when the entire economy is consumed by the legalized fraud. This could take decades, but the problem will slowly accelerate.

And if one thinks massive monetary creation should save government bonds, they'd be dead wrong. Inflation results in higher interest rates and higher prices, and therefore, the real value of the bonds will still be lower--if hyperinflation occurs, the bonds will be worth almost nothing--unless they are used as collectors' items in a few hundred years.

To those whom say we are experiencing deflation at the moment, let me remind you that it was not long ago when the housing market was said to produce infinite returns.

Sunday, January 25, 2009

The Unimportance of Immigration and Outsourcing

Throughout our history, mankind has found itself more than willing to brutalize those brothers and sisters among us whom are less fortunate than ourselves.

And for what reason?

Many of us are simply cowards.

The difference between the adult world and the playground is slim.

Protectionist sentiment often arises when jobs in auto manufacturing are shipped to Mexico, but no one seems to mind when robots take over, much less when cars last longer.

Some complain when Indians "steal our jobs" in call centers, but it is extremely rare for frustration to be voiced over easy-to-use electronics.

Amazon.com and other online retailers have destroyed thousands of jobs for cashiers.

Larger airliners have eliminated incomes for pilots.

Better fertilizers have destroyed the careers of thousands of farmers.

Computer programs have overthrown many accountants, paralegals, and even lawyers.

Toothpaste prevents dentists from putting more food on their table.

What is the real difference between technological efficiency and global efficiency?

The Answer: None.

Thursday, January 22, 2009

The Real Price of Housing

Many non-economists tend to forget that riches are a matter of ratios. In other words, how much value does one person's labor/production command in comparison to that of another? This is a simple, yet extremely powerful point to consider--like air, or even sunlight--we tend to take it for granted, even though our existence revolves around it.

Most modern economists tend to believe deflation is a bad thing: they say, "when deflation hits, it causes a negative downward spiral, and government spending/false money are needed in the short-run in order to smooth everything out--the free market will be there when we get back."

There is one small problem with this type of thinking, and that is when an economist such as myself asks, "ok, so who gets the government spending/false money?"

We have seen exactly who gets the money today. Bankers that caused a real estate bubble, and even car manufacturers who caused an oil bubble, and to a certain extent, the mindless individuals known as the poor and generally ignorant American workers whom did not educate themselves enough and/or prepare themselves enough for a future without even more unemployment insurance than they had originally bargained for. Now do not be offended that I do not sugar coat my thoughts, because the truth is powerful, and it will set you free: for at the end of the day, the middle class, and the university systems, have certainly not been bailed out nearly as much--and without these two pillars--the economy will be in far worse shape in the future.

Once again, riches are about ratios.

How much power (monetarily, socially, or otherwise) do you get for your hard work?

If you are an electronics engineer especially, the answer is--not much.

Let's see why this is the case. Pretend you work for Intel. Even though your market is a duopoly (and a weak one at that given the state of AMD lately), you are still expected to double production every two years given Moore's law. If you do not, your customers will simply continue using their old computers for as long as possible--considering some computers run for well over five years, this is problematic; therefore, to solve this problem, you must give your customers more value from their purchase in the short-run than they would find from waiting to buy a processor in another two years.

In other words, even though your customers are expecting deflation, your business is still around.

So why do so many economists think deflation is a bad thing?

Dear reader, you've more than likely been living in a dream world. You see paper and you think it is worth something. Well, it can be worth something. I was on digg.com today, and I found this.

http://www.inhabitat.com/2009/01/22/5000-dollar-recycled-paper-house-by/

A $5,000 house.

Now, this is obviously a poor home compared to what many of us live in. But one must think of all the money (and labor) they would pour into a conventional home that costs, let us say, $100,000 at the moment.

Is such a $100,000 home truly twenty times better?

Well, a first-time home buyer would probably be convinced by society that they should pay interest for such a $100,000 home given the past (homes have usually gone up in value).

But what if the $5,000 home becomes 15% larger the next year, yet drops in price by $500 a unit thanks to mass production?

At that point, your home's value would fall, all else being equal, because it competes with the much cheaper dwelling.

And what if people begin to worry about expensive homes holding their value now?

At that point, more people will buy the paper homes.

In other words, homes would become consumption rather than investment.

If some engineers from various fields worked on these types of creations, and if they were created by better and better machinery every year, eventually, people would begin to think of a home as being useful in and of itself. This is what drives technology, and this is what drives the economy.

We have become so fixated on our belief that homes will increase in value, even though they haven't given us anymore pleasure per se, that we haven't realized how much we get for our labor every time we turn on our computers. While bankers have been bailed out for propagating the herd like mentality of irrational exuberance, our scientists and engineers have begun to suffer.

There is no such thing as overproduction in the long-run. In the short-run, we may all lose money in some ways, but we would gain it back in others. If nearly everyone went bankrupt from their home values plummeting today, we could buy a new home for virtually nothing after a few short months of cooperation.

Today we believe in Obama, but I am asking you to believe in yourselves.

Monday, October 13, 2008

The Ridiculous Federal Government Pt. 1

Many people seem to think there are plenty of good reasons for nationalized departments of various forms (agriculture, education, etc.), and the vast majority of folks today believe the military should certainly be controlled by the President of the United States. Let me explain why these notions are so ludicrous.

Imagine you are hungry. Your refrigerator and cupboards are running low on food, however; therefore, you visit a grocery store in search of sustenance. The only grocery store available is a nationalized chain, and prices are constant across the board no matter where you live (in other words, a box of cereal costs the same in San Francisco as it does in rural Alabama). The only difference in a geographical item's price may be found in its final delivery cost (shipping and handling).

A perfect example of this in the modern world (and in the private sector, no less) would be an online store of some kind, so let us say that the type of food demanded does not spoil easily during transport. If you live in a major city with a large economy, you would benefit from prices that do not discriminate on the sole basis of your local economy, because wages are rightfully higher in your area: in other words, the real cost of the food from the online grocery store would be cheaper for you since your wages buy more. This is the way that the economy should work, however, because a larger city would enjoy economies of scale.(*)

More specifically, to see why metropolitan areas should be able to buy items at a discount, let us say there are groups of buyers in two cities: one group is in Los Angeles, California, and the other is in Cheyenne, Wyoming. The geographical area of the group of buyers from L.A. will probably have almost four times as many residents per square mile; therefore, when this group reorders supplies, a cumulative order to the online distribution center will be almost four times as effective, all else being equal. And if the online store uses a larger truck to deliver the food to Los Angeles, only one driver and one trip may be needed, while three or four separate trips/drivers may be needed to deliver the same amount of food to the citizens of Wyoming over the course of time.

The problem with government, however, is that it turns this logical notion of economies of scale on its head. By using income percentages to bill people in Los Angeles and Cheyenne for the same amounts of goods, the citizens of Cheyenne are given more for their money! If a worker in Los Angeles makes $10 an hour, they will pay $1 an hour to the government at a 10% tax rate; let us say this will go towards a federal purchase of weapons. If a similar worker in Cheyenne only makes $8 an hour for the same task, they will only pay $.80 an hour at a 10% tax rate towards the same federal purchase of weapons. What is more, if a war breaks out, citizens of Los Angeles are more likely to be targeted due to their city's greater value! Therefore, the citizens of Cheyenne are given even more security than the citizens of Los Angeles for about 20% off.

The Soviet Union is an excellent example of what happens as a result of so-called centralized planning (which ironically results in decentralized methods of production/distribution). Rather than allowing the invisible hand to distribute resources effectively through what spatial economists call the gravity model (this is similar to the natural models of physics), the Soviets built communities that could not sustain themselves far away from their needed input sources. Once the Soviet Union fell, many small communities became ghost towns. This is why it is so difficult to transition back towards a free market economy once a nation has been centralized for so long.

This is also why a person that argues against federal programs faces an uphill battle as a result of the programs in question having already been in place (bridges to nowhere are not only sunk costs, but more importantly, they result in an enormous number of free riders). Even though a centrally planned economy may not make economic sense in the long-run, it would be almost impossible to convince the unproductive citizens otherwise in the short-run. Usually, such citizens procrastinate in attaining self-sufficiency until the market overwhelms the best efforts of the government's planners, at which point even more suffering results than would have been the case if the situation had been adverted earlier.

*(Brick and mortar retail prices are traditionally higher in populated cities due to relatively higher real estate values in such areas: higher metropolitan rent/property expenses are partially passed on to consumers. This issue was addressed by David Ricardo when he claimed landlords capture the increased production of capitalists while workers remain at subsistence, which is a result of diminishing returns to land. We can reasonably factor landlords out of the equation today thanks to inventions such as the Internet. Furthermore, modern real estate prices are higher than they should be in a free market as a result of the inflationary policies of the Federal Reserve, which also harm low-income workers (renters) in metropolitan areas more than competitive workers in rural areas: not only are low-income workers in metropolitan areas not granted the offsetting capital gains metropolitan property owners enjoy, but furthermore, larger portions of metropolitan low-income workers' wages are captured by landlords.

Thursday, September 25, 2008

The Evolution of Weaponry

Humanity used sticks to hurt one another for a very long time—until we became “smarter,” that is. No one is exactly sure when the basic club was invented, as such technology is prehistoric, but once we began to understand the uses of ordinary tools, we slowly thereafter began creating primitive daggers. Around 1,000 years beyond the conception of the dagger, our initial swords were constructed: these longer blades would hold an important role in warfare for more than 3,000 years.
The first firearm, however, did not appear until the 9th century A.D.
Nevertheless, despite the firearm being a much more complicated technology than the sword, the newer device was improved at more than double the rate of speed. After only 1,000 years, the firearm became the primary weapon of the battlefield, insofar that our highly advanced swords were made rather useless products in a relatively short period of human history.
In fact, the vast majority of our lethal creations have been developed during the past 200 years alone: fully automatic modern machine guns are hundreds of times more efficient than the firearms our forefathers used during the American Revolution. For any meaningful discussion of relatively inefficient means of technological destruction must paradoxically include many creations which are still rather “modern,” for 200 years are hardly a lengthy span of civilization’s existence, as even the most complicated assault rifles of today are already much less useful in defending empires from invasion than highly advanced swords or bayonets were during the pinnacle years of the firearm’s usefulness—World War I: by the time World War II was underway, vastly evolved machine guns were already second to tanks, artillery, fighter jets, and bombers. Today, however, even highly advanced cruise missiles, attack aircraft, tanks, and artillery are second to somewhat unspeakable forces—we fear to even mention our greatest defenses!
But although most of us may not be sure as to how our modern military should function, especially when we may not play a good amount of chess (the latter game supposedly emulates military strategy, inasmuch that it is said to stimulate “deep thought”), at the very least, we may understand traditional militaries often rely upon archaic tactics and cloudy objectives, for such schools of thought give a great deal of credence to mindless order and the execution of established principals.
Such is the reason why the British walked in a straight line while wearing murderously hot red clothing during the years of the American Revolution.
If we fought in Vietnam, we are likely aware of how even basic weaponry can be effective against highly advanced modern technology when one’s commanders are foolish.
Today, fighters in Iraq are discovering just how potent basic weaponry and/or psychological warfare may be against an incredibly more technologically advanced militaristic force!
Indeed, psychological and/or political warfare is much more important in modern times than any theoretical ability a nation may have to destroy vast amounts of enemy forces is, for there is virtually no concrete reason for any major nation of the world to attempt to invade another, and the poorer nations of the Earth are hardly a threat to the independence of the greater powers.
Of course, in modern times, the weapons of mass destruction even poorer nations may produce are of meaningful discussion to even the richest nations of the Earth—but that is a proof of the point being made at the moment, which is to say that money does not necessarily buy security. For although the people of the United States are exceptionally worried when poorer nations may gain our great unspoken nuclear powers, our own nuclear arms are far more numerous, not to mention incredibly more advanced; nevertheless, even these devices seem to give us little comfort.
Modern invasions and bombings of second world countries have recently been justified by the rich nations of the world through the citation of the failure of the United States to respond to Hitler’s aggression at the beginning of WWII, and the supposed evil that resulted from such strict non-interventionism on our behalf (which is actually arguable to begin with, in that the United States could have allowed Russia, Europe, and Asia to have been mostly taken over, as such large empires would have quickly rotted from within, while our own nation could have grown much stronger in the meantime from a wave of European and Asian scientists and engineers seeking sanctuary here), but even if we believe such non-interventionism was foolish, such a war as thus occurred in an age composed of entirely different weapons and geopolitical forces.
Most Americans would not care about the “collateral damage” we would inflict upon other nations if we are being invaded by them—much less if we were being overrun by foreign troops—we would surely feel justified using weapons of mass destruction on nations which used such weapons on us beforehand. After all, most people in the United States feel justified in our killings of hundreds of thousands of innocent women and children in Japan—and Vietnam for that matter; yet, such instances of brutality on our behalf were not even of a purely defensive nature: they were counter-attacks, at best (Vietnam was certainly not worth the United States’ involvement).
Historically speaking, invasion has been for one thing, and one thing only—risk.
Humanity has often viewed our unjustified military attacks on nonthreatening (and/or irrationally threatening) neighbors to be possibly economical (and/or even spiritual/ideological), for a people may theoretically conquer and/or convert their enemy, thereby assimilating the defeated nation(s) into their own: such goals are known as the spoils of war. Nevertheless, when one understands that most of the economic power of the modern world is impossible to capture without almost certainly destroying one’s own country in the process through nuclear war (purely ideological and spiritual matters certainly do not require weapons and/or a great deal of material power in order to be transmitted and/or protected), most of the origination of warfare is necessarily eliminated, as most of the world’s natural resources, and people, are probabilistically secure.
The only reason any major nation would attack another today is if they felt such was worth dying for as a matter of principal—and although Islamic terrorists are about the only forces in the world willing to be so foolish, it is worthy to note that such people are not nearly as hell bent on attacking Switzerland as they are the United States, despite the Swiss economy being on a level similar to our own (it is often said that Islamic terrorists are jealous of our nation’s riches and/or that they believe we should die for our materialistic values, which is a half-truth at best; it should not be surprising to believe that Islamic terrorists are much more upset over the United States’ often unflinching support of Israel and our desire to exploit the oil fields of the Middle East rather than them being jealous over our riches directly).
In any case, our enormously expensive conventional weapon systems are surely not cost-effective in fighting terrorism, as this type of military tactic does not even rely upon weaponry a great deal whatsoever—September 11th was the result of civilian airliners being flown into buildings! This is a much different type of warfare than that waged by Imperial Japan and Nazi Germany.
If we are to be completely honest with ourselves—even advanced fighter aircraft, tanks, and artillery are barely useful as “special” weapons for industrialized nations of today—not only are they far too expensive to use in the defense of rather poor second world nations, much less those of the third world, but such military arms do not even guarantee rich nations victory!
A tank that costs millions of dollars to produce is a rather easy target for a five hundred dollar remote controlled mine hidden on an occupied street. Similarly, the reason an eighteen million dollar attack helicopter can be brought down by a two-thousand dollar rocket propelled grenade is simple enough to understand—most of the technological innovations of our modern military were not meant to perform the de facto “specialized” roles we have assigned to them. Specialization can work wonders, of course, especially when one has an ultimate purpose in mind, to at least some extent, but the United States’ military is far too aimless in its point of existence.
The fact that we are “converting” our existing Cold War weaponry to deal with terrorism violates the concept of specialization to begin with, although our government admits this when they desire our support for completely new weapon systems altogether. However, political admittance is hardly anything more than rhetoric the vast majority of the time, for our most expensive military systems currently in development are still being designed in order that they may eliminate massive conventional armies, for these machines were initially planned well before 9/11/2001—many of our “future” weapons on the drawing board today were initially imagined shortly before the Soviet Union fell: our defense industry has simply substituted the need to fight “communism” with the need to fight “terrorism.”
The Apache Longbows used in Iraq today were made to counter dozens of armed targets in a single moment through the use of heat-seeking missiles—they were never primarily manufactured to kill infantry disguised as civilians in urban settings.
F-16s were definitely not designed in order to bomb such people.
One may be wondering, after all, why it took ten years after the Soviet Union’s demise in order for us to understand we should no longer be making such weapon systems an economic priority—unless we believe countries such as Kosovo and Kuwait were worth trillions of dollars for the United States and Europe to defend in the 1990s—at the expense of dozens of other poor nations, for we could have used this amount of money to build up poor countries already at peace.
For what would have been the use (given the enormous uncertainties involved) of incredibly efficient attack helicopters and tanks in a direct war between the United States and the Soviet Union of the late 1970s and beyond to begin with?
Is it reasonable to assume that everyone would play fair in WWIII, despite the fact that we would be killing massive amounts of one another—even conventionally?
Perhaps it is possible that we would use inefficient methods of death and destruction for a time as a sort of gentlemen’s courtesy, as the commanders of civilized forces used to meet and have dinner with one another before their troops attempted to cut each others’ heads off, but in any case, we are far too ahead of ourselves.
1984 is a very interesting year, both in fiction, and in reality.
In fiction, it is the year in which George Orwell predicted totalitarianism would rule the entire planet. He predicted furthermore that the major nations of the world would be locked in an epic and never-ending battle between three major Superstates. These gigantic nations would be completely balanced militarily: although their alliances among one another would shift periodically, they could never truly defeat one another.
It is for this reason I shudder to mention creating anything resembling a “Superstate” between the United States, Britain, Australia, and Canada, but let us set this thought aside for a moment, as one could already assume the world is us thus: the European Union is quickly splitting from the United States and Britain as a result of our overly aggressive policies, while China, Russia and even India are becoming ever closer.
One specific prediction by Orwell was that the major nations of the world would continue to fight battles against one another in smaller nations, even though it was not truly economical for them to do so as an collective society, as the destruction and waste of warfare in and of itself would keep a relatively few fascist leaders in social positions of “power.”
In the 1984 of fiction:

War is Peace.
Freedom is Slavery.
Ignorance is Strength.

In the real world, the production of Peacekeeper Intercontinental Ballistic Missiles began for the United States’ military in the year 1984. Each of these missiles contained ten 300-kiloton W87 warhead/MK-21 Rvs.
It is a good thing we had such a great actor as our head of state; surely, he must have struck some amount of fear into the Soviets’ hearts. Then again, one may argue that the threat of full-scale nuclear war was far more fearful than any theatrical performance may have been—for it is strange to imagine that the Soviet Union was completely fooled by our “planned” star wars missile defense system (the plan to pass the expense of such through Congress was surely not imaginary), as the Soviets could monitor outer space, and as they were not far behind us in missile technology: the Soviet’s are the ones that began the space race by launching humanity’s first artificial satellite, after all.
But let us assume that the Communists assumed our theoretical missile defense system worked.
In other words: what if they thought that the United States could have shot down all of their nuclear weapons and killed all of them in a case whereby they attacked us first?
They would not have even had the joy in knowing we would have been dead too!
Unless the Soviets were complete masochistic and suicidal, this would not have made much sense to them, for it is not as if Communists believe forty virgins are given to martyrs in Heaven.
Surely, missile “defense” was more of an offense to the Soviets than anything.
And yet, we have hardly even analyzed the world’s nuclear weaponry yet.
Perhaps a picture will make things easier for us.


It is certain that some may mistake these lights to be the descent of angels from Heaven.
But if the Hiroshima bomb was fearful, imagine what a nation would feel when ten even more powerful warheads rain death from above—each streak of light in the picture above is a warhead separated from its Peacekeeper carrier—one such warhead is capable of being twenty times as powerful as the nuclear bomb of Hiroshima: in total, therefore, a single Peacekeeper missile was capable of being at least 200 times more efficient in its creation of destruction than the greatest B-29 of WWII. In reality, however, a Peacekeeper missile was much more efficient than thus, as its power could be dispersed among many different locations simultaneously, and more importantly, as its warheads would have been nearly impossible to shoot down in 1984 (due to their rapid speed of tens of thousands of miles per hour and the past limits of anti-missile technology).
There is little doubt that a single Peacekeeper missile targeting a major modern metropolitan area would have produced a catastrophic event well beyond anything recorded before in human history: the nuclear attacks on Japan in WWII would have been incredibly small in comparison to such a strike. Nevertheless, in 1984, a single Peacekeeper missile was hardly felt to be enough to defend the United States.
114 Peacekeeper missiles were manufactured.
With a range of 6,000 miles, a Peacekeeper missile was capable of striking most strategic targets in the world with little difficulty, for this is the approximate distance between Los Angeles and Australia. In 1984, the United States extended all the way from Maine to the tip of Alaska, and we held island territories in Guam and Hawaii. If this amount of territory was not enough to put our enemies within the range of such missiles, the United States were allied with Britain, Australia, and many other nations at the time: it was more than possible for us to have potentially placed such missiles in a large number of military bases around the world.
Nevertheless, despite the great theoretical power of our Peacekeeper missiles, our generals felt the system was highly vulnerable. Our commanders asserted such weapons could have been destroyed somewhat easily before they could have been launched, insofar that we should have possibly created a railway system of some sort in order that we may have transported and stored our Peacekeeper missiles in the event of a surprise attack by an enemy of some sort. As to how statistically vulnerable the Peacekeeper missile system was thought to have been, and as to how useful a railway track would have been in protecting them, one may not be certain (one would think, however, that railroads near hardened missile silos would have been much easier to have destroyed than hardened missile silos would have been themselves—although one must also wonder how we could have launched stored missiles without any hardened missile silos leftover to begin with).
In any case, since I am not a physicist, engineer, or military strategist, let us simply assume that the Peacekeeper missile system was at least slightly survivable, insofar that only 10% of the system would have likely remained operational after an enemy surprise attack: in this case, we would have still had 11 such missiles leftover, which is a fair enough amount of firepower to have destroyed the relatively more important parts of the civilized world, much less the important parts of the Soviet Union (if it was felt that the Peacekeeper missile system was likely not even this survivable, one must wonder why we ever built 114 such missiles, as each Peacekeeper missile cost $70 million, which is an expense one would think should have been worthy of a good amount of consideration, especially since we could have used this money in order to have built much more survivable nuclear options, which shall be discussed in an oncoming section of this book).
Now that we know the range, power, and theoretical vulnerabilities of Peacekeeper missiles, let us examine a possible scenario in which they may have been utilized.
Although the United States contain many more people in 2007 than the Soviet Union possessed in 1984, imagine what would occur if the Soviet Union of the past launched only 11 Peacekeeper missiles at the United States of today. The Soviets would likely target our major metropolitan areas first and foremost in order that they may produce maximum economical and political damage (eventually, this enormous amount of destruction would weaken our military forces a great deal).
Remember: each city in the following list would be hit with the power of 200 Hiroshima-sized bombs, and these detonations would be distributed throughout such metropolitan areas, insofar that there would even be some overlap in areas not directly hit. Any person lucky enough to survive the heat of these attacks would thereafter be engulfed by an enormous amount of radiation, and they would receive very little medical aid and attention for a good amount of time. For all intents and purposes, each and every city on the Soviets’ target list would be completely destroyed.


Cities Possibly Destroyed by a launch of 11 Peacekeeper Missiles

New York
Los Angeles
Chicago
Philadelphia
Dallas
Miami
Atlanta
Boston
San Francisco
San Diego
Washington DC

Imagine what the United States would be like as a result of such a strike: our financial and political centers would be destroyed; a large percentage of our population would be killed; an enormous amount of our infrastructure would be eliminated; and what is more, many of the intermediate products originally manufactured in such destroyed cities would thereafter need to be created in whatever cities may remain: in other words, if one’s local businesses largely relied upon parts and/or labor from any of the areas listed above, and/or if one’s suppliers relied on such, one would essentially be out of business themselves until such products and/or services were restored—essentially, a massive economic ripple effect would result. The modern economies of nations are extremely interconnected; the entire world would be sent into a catastrophic scenario, insofar that we would not be able to receive a large amount of International aid in the event of such an attack—the expectations of such matters alone would likely cause the situation to be even worse than it would be in and of itself!
This type of a situation would make the Great Depression and WWII seem as if they were walks in the park, although there would surely be a great amount of work available for us to perform—our economic statistics would look fantastic from this point onward, as we would need a great amount of economic “growth” to get us back to where we were originally!
The events of September 11th show how little fear and damage is necessarily in order to bring a great nation to its knees. Some of our politicians glorified our economy’s “resiliency” when the stock indices of the United States only dropped 14% after a few of our airlines crashed into some of our buildings—despite our markets having been closed for an entire week after the attacks—but surely, if only a few civilian airliners could cause such a massive amount of financial damage, one could only image what would occur from two Peacekeeper missiles hitting New York City and Washington D.C alone.
One of the United States greatest bombings of Japan occurred when we sent a handful of conventional aircraft in a genius attack that struck them in their hearts.

When you kill one, it is a tragedy; when you kill a million, it is a statistic.
--Joseph Stalin

Although terrorist attacks are certainly tragic for our nation, inasmuch that a single life is worth more then many people realize—such events are nothing compared to the unimaginable horror our relatively powerful country would feel from only 11 Peacekeeper missiles hitting our cities—then again, death may very well be peaceful.
In any case, would America have ever tried to invade the Soviet Union if the later nation merely had a handful of such weapons on standby, along with a limited conventional defense force that may have guaranteed their nuclear weapons’ survivability long enough for them to have launched such a “small” counterattack against us?
We are afraid enough of the potential nuclear weapons of Iraq and Iran! Even if Iran shall build nuclear weapons in the next ten years, their uranium and technological resources will limit their weapons to be much smaller, less accurate, and less numerous than 11 Peacekeeper missiles would have been, even though our future anti-missile technology shall be far more advanced than that which the United States of 1984 possessed.
For even if we had wanted to have “freed” the Soviets, the simple answer as to why we never attempted to set a militaristic boot in their empire is obvious—we were not completely suicidal ourselves, as the Soviets truly had far more nuclear arms than a few Peacekeeper missiles.
And yet, although it would have been impossible for the United States to have invaded the Soviet Union, the Soviets were quite incapable of conquering Afghanistan conventionally. Nuclear weapons were not even needed to defend such a poor nation against Soviet aggression: a relatively cheap stinger missile system, C.I.A. training, and Islamic fanaticism were enough to defeat the great evil Superpower many people in the United States thought would be the inevitable deliverer of Armageddon.
Nevertheless, our Senators and Presidents from both political parties throughout the decades following WWII declared adamantly that the leaders of the Soviet Union were incapable of basic reason. It was argued that the Communists were more than willing to launch a full-scale nuclear attack against the United States, if not for the simple fact that we were a “capitalistic” society. They claimed a war between the Soviet Union and the United States would not be based upon anything economical, but instead, it would be based upon purely ideological differences. There was no doubt that such brutal and insane dictators would be incapable of the fear of death: it was explained to us that the Soviets simply cared about power, domination, and the destruction of life; they did not care about peace, and their people were cowards afraid of rising up against those who ruled over them on their own!
Sounds familiar; doesn’t it?
Perhaps our politicians were right to tell us to be afraid of the Soviets, even though history has proved otherwise, insofar that the Soviets likely feared us much more than we feared them, but even so, one must question the reasoning of the American government even furthermore than we have, for we would have only needed roughly seven Peacekeeper missiles to have reached their intended targets in order for us to have eliminated the majority of the U.S.S.R.’s economy if such targets were the following: St. Petersburg, Moscow, Leningrad, Stalingrad, and two additional cities, all of which could have been completely destroyed with such an amount of weaponry (most Americans are probably unable to name more than four Russian cities today!).
For if only seven Peacekeeper missiles were not a large enough nuclear deterrent (which was less than 6% of the past United States’ Peacekeeper arsenal), as the Soviets were actually unafraid of death and destruction, than there was definitely no use in the United States building so many expensive fighter jets and other types of conventional weaponry in addition to such an amount of Peacekeeper missiles, just as there is no use in building such conventional weaponry today in order to defeat Islamic fascists, although for opposite reasons (even conventional weapons are too large in our new war of “ideology”).
Indeed, we have spent our money on far more needless conventional matters than Peacekeeper missiles, as one would think a few $70 million ICBMS would be a fairly cost-effective method of inducing fear in light of the money we are willing to spend on a single airplane at times.

This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence — economic, political, even spiritual — is felt in every city, every statehouse, every office of the federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.
In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals so that security and liberty may prosper together.
-President Dwight D. Eisenhower, Farewell address, 1961

When Eisenhower spoke these words, the Cold War had hardly even begun. Therefore, this quotation does not show the truth of how much unwarranted influence the defense industry now holds over the American Congress, much less the other various branches of our government—including that which is the most important, which is to say, the masses of the United States. For although the potential of nations to claim the spoils of war has almost entirely evaporated from the Earth—taxes surely have not—such funds as thus always make war beneficial to one party or another.
But let us examine the military industrial complex in true detail.
Just for fun, let us analyze meaningless fighter aircraft in particular.