Ron Paul - The Civil War Was Not Necessary, Video

By now you may have heard about Ron Paul's statement that the Abraham Lincoln should never have gone to war to free the slaves. He argues that there were other solutions, such as phasing out slavery through government purchase of the freedom of the enslaved individuals. There are so many problems with this point of view it's hard to know where to begin. Let's just assume that the only reason for the civil war was to free the slaves and take it from there.

Capitalism is about free trade and association between free individuals. Obviously, if one party is enslaved, there is no free trade between the two. Slavery is the worst form of thievery. Condoning, legitimizing, compensating individuals for immoral behavior is never a wise thing to do. What Mr. Paul proposed goes even further, since the funds for compensating the slave owners would have come from those who chose not to engage in slave trade. The moral would be compensating the immoral. What kind of precedent would that set?

Suppose you saw a man brutally beating an elderly woman on the street. Would you physically stop him or negotiate what the beater felt was a fair price to stop? Do you think the payoff would result in the beater being more or less likely to engage in reprehensible behavior in the future? If your child got caught shoplifting, would you raise his or her allowance if they promised to stop?

Don't you think many a newly enriched slave owner would immediately look for another distasteful, but not yet illegal activity to engage in? What about the people who chose not be slave owners and were required to pony up compensation for those who were? Doing the right thing because it was the right thing would have been institutionalized as a money losing proposition.

600,000 lives were lost during the Civil War. The loss of even one life is a terrible tragedy for those who knew and loved the individual. These lives were lost because some felt perpetuating the slave trade was worth dying for, while others felt stopping it was equally worth dying for. In regards to the question of whether it is right for one human being to own another one, there can be no comprimise. The two diametrically opposed positions cannot occupy the same place at the same time. If the slavery proponents were set on taking their position to their deaths, so be it. Fortunately, their opponents were just as resolved.

There are those who believe that there exist ideas and ideals that are more valuable than their own life. There are others who believe that continuing to draw breath is all that really matters. The former are in the minority, but the latter are far less consequential.

Free Energy Challenge

There's a lot of buzz these days about "free energy" machines. These machines seem to violate the laws of physics (seem being the key word). While I don't dismiss the idea, and can even get my head around the possibility that what's being tapped is actually a source of energy as of yet, unacknowledged, I do find it very suspicicious that some of the "pioneers" in the field have had their devices under development for decades with no commercial results other than books and videos.

You'll hear a variety of excuses for this - "We can't get a patent. We need more funding. It's almost ready!"

Here's the challenge:
If you have developed a system that produces more energy than the user must contribute to it, put something on the market. It doesn't have to be revolutionary. Create a lamp that one never has to plug in or replace a battery for. You don't even have to go mass market. Make a couple and sell them on Ebay. Forget the patent. If you're the first to market with such a thing, you'll make a fortune on the interview circuit alone.

The lack of funding or patent arguments are pure bunk. The recognition for being the one to bring a revolutionary discovery to the public arena would make you rich in and of itself. If you have no product, you have nothing. If you think you have something, do the Google thing: Give it away and capitalize on the gooodwill. If you don't someone else will.

Good, luck! I'm not holding my breath.

The Business of Creating Life in the Lab

Over the past decade huge advancements have been made in genetic engineering. Scientists and engineers have found ways to tweak existing dna to make more disease resistant plants, more weather resistant plants and a host of other modifications. One of the major benefits of this technological revolution will soon be showing up at the gas pump. Shell Oil recently announced that it will begin construction immediately on a pilot plant in Hawaii that will produce biofuel from algae. While the technology has been around for awhile, it only recently became viable as a competitive source of production due to new advancements in genetically engineering bacteria for opitimum performance, and more improvements in that arena are soon to come.

Now some are on the verge of creating new DNA from scratch. What are the implications of the created becoming creators? One may be the eventual death of the mining industry. Microbes are the most efficient chemical factories on Earth. We are only just beginning to recognize the potential of letting living organisms do the work that is now being done by humans and machines. With taylor made living chemical factories it may become possible to produce any chemical imaginable from sludge, garbage, exhaust and other inexhaustable resources. This may even one day extend to heavy metals.

Of course there's also the danger that some whack job will use the technology to create something sinister, like a killer virus or an organism that reduces plastics or metals to piles of goo. Once knowledge is in the public arena, you can't take it back. Such is life. The trade off in progress is perhaps less security.

This leads to another possible downside. Safety and security concerns have already reduced grade school chemistry to mixing baking soda with vinegar and watching it fizz. Youngsters used to get excited about things like chemistry and electricity while playing with their home kits. Now, many of those types of educational playthings are not available. Could we see a day when even the most basic of educational resources are banned from public consumption due to safety and security concerns? I hope not. Keeping us safe by keeping us ignorant is not a road I'd like to go down.

In my humble opinion, the benefits of knowledge out weigh the dangers. So, pass the apples and boot me out of the garden.

Are Corporate Interests not Your Interests?

Once again I hear on the news a commentary that includes taking matters out of the hands of "evil, greedy corporations" and putting them safely in the hands of the government.

Granted there are corporations and executives that give capitalism a bad name, and those who go along with the "business/government partnership" game should be taken out and shot. But generally speaking, you've got to be completely oblivious to reality to think the government can do a better job at almost anything than a corporation or private sector enterprise.

To put the matter in perspective, just think about this hypothetical:

You have a problem that needs to be solved quickly and efficiently. You have two boards of directors to choose from who will be responsible for solving it for you.

Board 1 consists of George Bush, Al Gore, Hillary Clinton, Rudy Giulliani, Nancy Pelosi, Mike Huckaby and Mitt Romney.

Board 2 consists of Steve Jobs, Richard Branson, Muriel Siebert, Mary Kay Ash, Jack Welsh and Scott McNeally.

Assuming you know who these people are, the choice is a no brainer. Board 1 will ponder how everyone will feel about any decision they make and how it will effect them in the polls. Board 2 will come up with real executable solutions.

Capitalism is about creating value.
Politics is about creating emotion.

Corporations run on capitalism.
Governments run on politics.

Government should be used only when absolutely necessary.

Always avoid mixing the two. Like mixing vinegar with ice cream, it doesn't make either one better, it ruins both.

The New Space Race - the Helium 3 Rush?

There's a new space race brewing. The target is once again the moon, but this time the race is not between two governments, it's between governments and the private sector.

The Bush administration has set a goal for returning a man to the moon by 2020. Estimated cost to the taxpayer - $100,000,000,000.

Gerald Kulcinski, a professor who leads the Fusion Technology Institute at the University of Wisconsin at Madison and Apollo 17 astronaut Harrison Hagan "Jack" Schmitt, also have a goal of getting to the moon by 2020, to mine it for Helium 3. They want to form a company to accomplish the task. Cost to taxpayer of private sector venture - $0.00.

Fusion is the holy grail of the energy industry. It's the process that fuels the sun. Unlike fission, fusion is when molecules are forced together, releasing tremendous amounts of energy. Hydrogen has been the fuel of choice to this point, but it has some major drawbacks. The chief obstacle is that it releases a lot of nuetron radiation, which degrades the reactor. Helium 3 can produce similar amounts of energy without all those nuetrons. The Earth has very little Helium 3. The moon has plenty. Helium 3 is deposited on the moon via the solar wind. The solar wind is diverted around the Earth by its atmosphere "No Helium 3 For You!". It's estimated that Helium 3 could yield around $4 billion/ton. Enough to fuel a new lunar "gold rush".

This new incentive for private sector ventures into space will bring up some very important issues. How does one establish ownership of land in space? If you were to go to the moon, declare it a country, and set up a government, who would have to approve it? Who would nix it?

One thing's for sure. We'll be better off if the private sector wins this race. To all you "richer than God" entrepreneurs out there, before you consider another remake of the Taj Mahal on your back 40, think about investing in the new West. (I'm looking at you Ellison.)

The market is smarter than any committee, I don't care how many elites are on it. The best way to destroy innovation in any industry is to give government control over it. When's the last time you got excited about a blockbuster new product from the post office?

Fed Rate Cut, A Layman's Guide to Fed Policy

The Federal Reserve Board will announce today whether or not they will reduce the rate which they charge banks to borrow money overnight. This is always a highly anticipated announcement and guessing what the Fed will do and when has become an industry unto itself. What's all the fuss about? Here's the simplified version:

Cash is a product, like any other. It's an "avatar" for wealth. A tool for facilitating wealth and asset transfer. A substitute for direct barter. Banks "sell" cash to customers, who pay them back with more cash (loan plus interest). The banks get their inventory (cash) from customers who deposit money with them. Banks are not allowed to lend out all of their inventory. They have to keep a certain percentage on hand to cover withdrawal requests. When the bank's inventory of cash falls below required levels, the bank borrows money from the Federal Reserve overnight to cover the shortfall.

When banks are faced with increasing slow pays and defaults, the amount they must borrow overnight increases. This causes costs to go up, which are passed on to consumers down the line. This is why the Fed's overnight lending rate is so closely watched and why it can be a useful tool in affecting spending behavior, at least short term. When the Fed lowers the rate, banks can afford to cover more shortfalls for longer periods of time and aren't under as much pressure to raise their lending rates or take aggressive collection action.

When the Fed raises overnight rates, banks will often raise their own rates and/or tighten credit requirements to ensure a higher percentage of on-time payments.

The Prometa Experiment by Terren Peizer's Hythiam Inc.

Hythiam Inc (Ticker symbol HYTM) is promoting a new treatment for methamphetamine, cocaine addiction and alcohol addiction called Prometa. Although the three drugs used in the treatment have been FDA approved, the treatment has not been approved by the FDA for addiction control. Company CEO Terren Peizer, decided to market it as such anyway. He claims this is something he just couldn't sit on. FDA approval can be a long and tedious road. If this really is something that can break the scourge of addiction to these powerful drugs, it would be quite a waste to allow all of the suffering and misery that goes with them to continue when it could be prevented.

From Wikipedia: Prior to his work founding and serving as CEO of various companies, Peizer got his start on Wall Street. In his early career he held senior executive positions with the investment banking firms Goldman Sachs, First Boston, and Drexel Burnham Lambert.

In 2006 Peizer announced that Hythiam would be working with The Farley Foundation, founded by members of the comedian Chris Farley’s family, whose mission is to help spread the word about the need for addiction treatment. The Farley Foundation agreed to let Hythiam use the late comedian’s image in a now well-publicized awareness campaign. Tom Farley, the late comedian’s brother, joined Peizer in educating the press and public about addiction as a biological disease that needed to be addressed with medical solutions as well as behavioral ones. While the campaign generated a lot of attention, it was also criticized for its use of the late Farley's image.

This is an interesting case study for free market testing of a product versus a government pre-approval process. There are skeptics who say that Peizer is just trying to capitalize on desperate addicts and that his claims are overblown. While there are cases of people for whom the treatment didn't work, there are also many patients who claim the treatment saved their lives. I guess the question you've got to ask here is, even if the treatment turns out not to be effective, is it any worse than spending a month continuing to devour meth or coke or booze? In this case, I think market testing of a treatment is a great way to go. If it fails, no real harm done. If it succeeds, Peizer is a hero.