An Open Letter to Robert Kiyosaki

 

In case you don’t know, Robert Kiyosaki is the author of the Rich Dad series of books on financial literacy, and he and his beautiful wife Kim are the creators of the board game called Cash Flow, a marvelous financial learning tool for young and old alike.  I am a fan of Robert Kiyosaki.  I met him and his wife in a bar in Pittsburgh, PA.  They are very genuine, down-to-earth, and friendly people.  They are for-profit educators, and they clearly have a passion for their subject.  And yes, I really believe Robert’s story about his rich dad and his poor dad.  I don’t think Rich Dad is a figment of Kiyosaki’s imagination.  So I am a believer.  I don’t make statements like that very often.  I have something to say to Mr. Kiyosaki, a disagreement I want to air with him.

Dear Mr. Kiyosaki:

If you are reading this, you already know we are kindred spirits and I admire what you do and share your commitment to financial education.  In a recent article you wrote that some of your best financial advice is to not be average.  That comment was the source of considerable outrage on the part of your readers, judging by their comments.  Perhaps they wanted your message gift-wrapped in softer language, but I couldn’t agree with you more. 

Very few people truly comprehend the mind-numbing reach and power of their government, and its insatiable appetite for their earnings and its religious zeal to dumb them down and control their lives.  Therefore they do not understand how much the odds are stacked against them in their endeavor to break free from the rat race.  They do not understand that to be average is to have no chance.

Read more..

Why the Federal Reserve Exists

Here we go with the vocabulary thing again.  I promise to make this easier than your last root canal.  The Federal Reserve Bank is a central bank.  Central banks are created to control and manipulate the money supply.  The money supply is the aggregate total of all the money in circulation in an economy.  It is often referred to in the media and the industry as M.  Controlling the money supply frees governments from the responsibility of living within their means.  It makes it possible for them to counterfeit money.  All governments have laws making counterfeiting their currency illegal.  That is because all governments have a monopoly on counterfeiting and do not tolerate competition in the business.

Governments counterfeit money in the exact same way all counterfeiters do; they print it, and slip it into circulation into the economy.  They spend it.  They spend more money than the economy produces because they do not want to live within their means.  They do not want to live within their means because they use money to buy votes.  They give out goodies in return for favors; favors in the form of legislation that promotes the welfare of one group over another group; favors that line their individual pockets, reward their friends, punish their enemies, and above all, favors that get them re-elected.

Other reasons are given, of course, for the existence of the Fed.  But it is axiomatic that all governments seek continual expansion of their powers, and control of the public purse and the power to tax is the Holy Grail for power seekers.  The founding fathers of this country feared government more than anything, and the Constitution they framed was to protect us, not from foreigners, and not from each other, so much as from our elected government itself.  The debates about economic policies are a sideshow and a distraction; the main event is the relentless expansion of executive power and the quiet transfer, not only of wealth, but of personal liberties as well.  Without economic freedom based on individual rights, private property, and the right to keep and dispose of our earnings as we choose, there is no freedom at all. Read more..

Why Democracy Isn’t Enough

Human beings are a tribal species, and like most of the lower species on this planet, they prefer to travel in herds.  Truly free thinkers have always been a desperate minority, and it has been the unfortunate destiny of such individuals to periodically carry the world forward on their backs, often having to apologize for their discoveries, recant their theories under torture, or have their earnings plundered by their inferiors.  In a world culture based on the nonsensical concept that all men are created equal, these individuals have broken from the herd in their thinking, transcended commonly accepted “truths” and challenged the orthodoxy of the day.  Their discoveries and powers of production have done exponentially more to raise the standard of living  the world  over than the efforts of all the hand-wringing social planners of the planet combined.  The politicians of the world would have nothing to redistribute were it not for the outstanding minds and abilities of these scientists, engineers, and entrepreneurs.  To say that these persons are only the equals of the hordes who benefit from their exceptional minds can only be called the triumph of ideology over reality. Read more..

Why We Believe: The Power of Utopia, Part II

 

In Part I of this article, I discussed how people are vulnerable to belief when they are unhappy or unsatisfied, and most people are one or the other most of the time.  In times of dramatic change, people are scared, insecure, and eager for anything that promises certainty.  Unsure of themselves, they are quick to follow any Confidence Man or Group who exudes a high level of certainty and self-assurance, whether the facts warrant it or not (and they usually don’t).  When the Confidence Man (or Group) also promises some form of utopia that people want, and if that Utopian suggests that the crowd can have what they want by taking it from someone else, few will resist that temptation.  Such plunder is always camouflaged in language of some form of altruism, of everyone sacrificing or giving up for the common good.  Such behavior is successful because historically, for millennia property existed by permission, not by right, and it was usually acquired by military acquisition, not by trade.  Those who actually produced economic values were viewed as serfs, as socially inferior to those who controlled their products by force.  In addition to this historical emphasis on property acquired by force and kept by permission, feudal society viewed the tribe, not the individual, as the core unit of society.  So when we moved to the Industrial Revolution, property earned was considered the property of the group, or tribe, rather than the individual.  The prevailing philosophy has been one of altruism, meaning that the individual was expected to give up some part of his earnings, without compensation, to the tribe.  Although technology has changed dramatically, we still cling to these ancient paradigms. Read more..

Did Capitalism Fail?

The global economic crisis now in play is being universally touted as the failure and collapse of capitalism.  The cover of the February 16, 2009 edition of Newsweek ecstatically proclaimed “WE ARE ALL SOCIALISTS NOW”.  The documented collapse of Wall St. institutions and international banking is being gleefully interpreted as the failure of capitalism itself.  In the furious debate that has ensued, the arguments for and against capitalism have focused entirely on the causes of various recent economic phenomena, such as Wall St. greed, the failure of regulators, the incompetence of one or another administration, and the complexity of derivatives that were both unheard of and technically impossible only twenty years ago.  All of them have totally missed the point.  Capitalism has not failed, because capitalism was not practiced to begin with.  Pure capitalism has never been practiced because it is philosophically unacceptable in our culture.  What is called capitalism today is a hybrid political philosophy so filled with contradictions, it is unable to defend itself.  To answer the question in the title of this article, we have to begin at the beginning. Read more..

Why Socialism Always Loses (and Always Wins)

Every so many years during the last quarter century a book has been published declaring the death of socialism and the triumph of capitalism.  Always rash, such predictions were not only premature but incurably optimistic about human nature.

 

Briefly put, socialism is the concept that wealth should be redistributed from those who created it to those who need it.  It is based on the concept that all men are equal, or would be at least, were it not for factors beyond their control, such as genetics, culture, personal history and upbringing.  None of us get to pick our parents or our gene pool, and we can easily become trapped in our neighborhoods and other disadvantaged circumstances.  Read more..