Surviving a 70 Year Error


The first book I wrote in the 1970s was entitled “Passport to International Profit”.   One chapter in the book was about the “Concept Conversion Trick” and how it creates the “Soil Defense Syndrome”.

Passport-Internatonal-Profit-gary-scott

Here is an excerpt from that chapter:

“The Concept Conversion Trick begins when people agree on a good concept for working and living together.  The people go to work and if the concept is good they will create a paradise.  The government gives them a flag and a song. Then the government pulls the trick.  The government convinces the people that the flag and song are important.  Then while the people are busy watching the flag and singing the song, the government replaces the concept with a set of ever increasing written rules and regulations administered by bureaucrats and backed up by a police force.

“This trick trades people’s individual freedoms for a shiver up the spine when the song is played the piece of cloth is waved.  The Concept Conversion Trick turns spirit into matter.  Like trading love for a beautiful plastic doll.  When the trick has been pulled and the dust settles, the people realize too late what has happened. Anyone who steps out of line is called unpatriotic or even criminal.  He is swatted down by the bureaucracy or police force, crushed with overwhelming power or made an example of so others will tow the mark ‘for the good of society’. All this is done in the name of public interest.”

If this writing sounds prophetic having been written almost 40 years ago, it was not.  A simple review of any previous great society shows that this trick was part of its evolution.  Like the Roman Empire, things may get better for a while, then worse and then better again.  In the long term, as societies age, they lose their original vibrancy and life.

Should we be surprised?  Does not every single thing in this universal existence develop in the same way, vibrant and flexible while young and growing thicker and more brittle with age?

My father loved animals and worked at the Portland City Zoological Gardens.  He was a really kind, gentle, fair and scrupulously honest man.  Yet one of his jobs was doing the zoo’s annual budget.  I recall him spending weeks late at night (on his own time) working over these budgets each year.  I also remember his telling me that every year they had to ask for more money because otherwise the city government would give them less. “If we do a good job with their funds, they penalize us,” he told me.

This is how the bureaucracy and society works, millions of small units each trying to grow until the whole swells into an unstoppable mass of self-interest.  This is the universal nature of growth.

This truth shows us the nature of mankind and every underlying force that goes from birth to continuity and then transformation.  This is the way of life and once we accept this, we can become better investors who embrace change and adapt.

This is why I have almost always bet against the US dollar.

This is why my business has been global for more nearly 40 years.

This is why I am so involved in a global business from Small Town USA now, where more of the old American values linger.

Gary

The Greek Irony

Soon you could be reading… again, about how instability in Greece threatens our modern world.   Greece, once a great nation, has debt and deficits that threaten order around the world.  This is nothing new.  In fact, deterioration in Greece is one reason for a seven decade downward spiral in America’s freedom.  Greece was a flash point that accelerated spin in the news.  Yet wisdom from Greece shows us the key to freedom in an increasingly cynical world.

downwards spiral

A downward spiral of freedom began a downward spiral of our freedom.

The loss of our beliefs has made us cynical.  Our most fundamental rights have been eroded both by governments and big business.  According to a Gallup poll, the most unpopular three institutions are big corporations & Wall Street banks, HMOs and Congress.  Yet there is little we can do because these institutions control the spin in the news.

In the past 30 years the numbers of companies controlling America’s media has dropped from 50 to six.  Today’s news is shockingly uniform in our media.

As our rights erode, no one in mainstream media says much about it.

“Rights” are defined as “privileges to which we are entitled.”  Whereas “Freedom” is said  “to be the power of choice.”  Do we feel like we have rights and freedom when we deal with city hall (local state or federal), or with our bank, or utility or HMO?

Over the last 50 years the average income for 90 percent of the American population fell.  Our health system is restricted by a Kafka-esque maze of legislation and insurance regulations that delay, frustrate, and thwart attempts by patients and doctors from proper medical care.  Big banks and corporations restrict our freedom of choice.  The business customer relationships are no longer transactions between free equals.

Banks can trap us in indebtedness at every age from student loans to mortgages to health care costs.  They pay almost nothing on our savings.  They hide unexpected fees and payments in complex and unreadable documents.  Banks and big corporations routinely conceal vital information in small print and then cheat.  Weak regulations and lax enforcement leave consumers with few ways to fight back.  Many of these businesses ranging from cable TV to phone and internet service to health insurance have virtual monopolies that along with deceptive marketing destroys any form of free market.

These same companies control the credit-scoring agencies so if  we don’t pay unfair fees, our credit scores will plunge and we could lose the ability to borrow money, rent an apartment, even to get a job.  Many consumers are forced to accept “arbitration clauses” in lieu of  legal rights.  The alternative is to lose banking, power, and communication services.

Big business has also usurped our privacy.  Internet companies sell our personal data.  Personal information is pulled from WiFi and iPhones track and store our movements.  The government can access this information, sometimes without subpoenas.  There’s a lot that we don’t know, often withheld under the guise of “National Security.”

When did this deterioration of our life liberty and happiness begin?  One time we can pinpoint is the passing of  President Franklin D. Roosevelt in 1945.  Vice President, Harry S. Truman became president that year and one of his decisions, over 70 years ago, began a cycle that has strangled the freedoms that created a great nation.

How the National Security Act of 1947 destroys freedom and accelerated a downwards spin.

Benjamin Bradlee, executive editor of The Washington Post clarified the problem with spin when he said, “I would define spin as the shaping of events to make you look better than anybody else.  I think it is . . an art form now and it gets in the way of the truth.

There has always been spin.  Winston Churchill summed up the power of spin when he said “I know history will treat me well because I intend to write it”.

But a particular spiral of spin, that has robbed us of most of our freedom, started when President Truman shifted the US from avoiding regional conflicts not directly involving the United States, to a policy of active intervention in far away conflicts.

Truman’s policy was that America’s “National Security” would be protected by providing political, military and economic assistance to all democratic nations under threat from external or internal authoritarian forces.  The Truman Doctrine reoriented U.S. military and foreign policy and led to The National Security Act of 1947 and creation of the National Security Council (NSC).

The problem with the Act is it let the NSC and CIA decide (often secretly) what is “National Security”.

The initial excuse that began the erosion of our freedom was communism in Greece.  The British Government had withdrawn military and economic assistance to the Greek Government and Truman believed that the Soviet Union could gain too much influence over Greek policy.  The US became involved.

The 1947 act also established the Central Intelligence Agency (CIA).   Then the spin really began leading to a war in Korea, then Vietnam, then the Middle East.  President Nixon, used the NSC, headed by Henry A. Kissinger, to actively engage in negotiations with foreign leaders and implement decisions already agreed upon by Nixon and Kissinger.

The West has been in a perpetual war since.   Government is broken.  Legislative and executive branches focus on fighting rather than on running nations.

Leaders create laws for their own political purposes.  For example, Richard Nixon’s former Domestic Advisor, John Ehrlichman, told how the war on drugs had nothing to do with eradicating drugs.   The laws allowed the government to associate hippies with marijuana and others  with heroin.  He said: “We could arrest their leaders, raid their homes, break up their meetings and vilify them night after night on the evening news. Did we know we were lying about the drugs? Of course we did.”

Part of the original Truman story was the idea of “containment”.  This spin is still being spun.  Cold war temperatures with Russia have been rising and may rise higher.  In 2014 Measure HR 5859 won unanimous initial approval in both the Senate and House.  This law mandates U.S. sanctions against Russian arms and oil, plus authorizes providing lethal assistance to Ukraine’s military.  Those provocative steps go beyond what the White House and European Union have been willing to do so far and yet the vote was unanimous.

Why would anyone want continual war?  Wars are bad for the common man but make money for a select few.  Wars also give governments the ability to deprive the public of its rights in the “interest of National Security”.

Another benefit (for a few) of continual war is that the war eases deficit and credit financing.  Deficit financing is the process where governments spend more money than they have.  They borrow or print money to fill the gap.  An occasional budget deficit is to be expected, but in times of peace an informed pubic has the sense to see that no one, governments included, can always spend more than they earn.  During times of war financial caution is more likely to be ignored.  Endless wars of containment allows governments to abandon the idea of balancing a budget.

Credit financing is a good thing if the borrowed or printed money is invested into capital that creates increased production sufficient to bring returns greater than the cost.  Regretfully this rarely happens.  Deficit financing occurs instead.  Governments spend more money than what they have and use it badly.

Spinning a bad expenditure is easier than working hard to spend efficiently.  Money makes it possible for us to buy and sell without bartering.  Money gives us a “medium of exchange,” which allows our complex global, economic system to function.

So much that glow on Western democratic capitalism has dimmed…or so it seems.  The US, leading the way, is still a superpower with economic, innovation and military might, but the institutions that should serve the people have become  flawed or broken.

America’s infrastructure is in shambles.  The nation’s bridges are crumbling, many water systems are filled with toxins, yet instead of spending more to fix this, we build more prisons.  The 2.2 million people currently in  jail is a 500 percent increase over the past thirty years.

60% of the inmates belong to ethnic groups.  Not just non-white ethnic groups are suffering.  Annual death rates are falling for every group except for middle-aged white Americans.  Death rates are rising among this group driven by an epidemic of suicides and afflictions stemming from substance abuse, alcoholic liver disease and overdoses of heroin and prescription opioids.

America’s middle class is shrinking.  Nearly  half of America’s income goes to upper-income households now.  In 1970 only 29 percent went to this group.  The top contending presidential candidates condemn income inequality, but Donald Trump has billions built on 2nd generation wealth and Hillary Clinton collects six-figure speaking fees where she ironically condemns “income inequality”.

The 2016 presidential campaign shows that this is the year of anger.  There is anger over immigration, abortion, income inequality, trade jobs, welfare, Social Security, health care, the justice system and so much more.  The biggest lies seem to attract the most votes.

How do we invest in a cynical world?  What can we do?

Regretfully these attacks on our freedom are realities of life.  There is little we can do to change this big picture.

Fortunately there is a lot we can do to live well despite this cynical world.  To begin, recognize how much good we do have.  Having lived, worked and invested around the world for nearly 50 years, let me share a secret.

The secret is that things are really good in the western world.  Despite the problems, we are surrounded by more abundance and greater opportunity than almost anyone has ever enjoyed, anywhere, ever.   To enjoy a fair share of this wealth, all we have to do is understand human nature and learn how to invest in a cynical world.

See beyond the parts of human nature that make us victims of education.  Each of us learned a blemished social economic model that gave us a flawed perception of how the world should be.  This faulty educated view can distort our outlook so we miss the fact that we really are in one of the most amazing times of opportunity!

The habit is to fixate on the past and remember it as better than it was.  This lure of the past makes us resistance to change.

We have free will and do not have to let the poor government, wars, deterioration of economic and social injustice blur our well-being.  We are responsible for our world.   The majority put the blame on government and big business for failure.  Both focus on all that is wrong, but rarely do anything about it!

Start assuming that no one will come to your rescue.  See life for what it is: a gift.  See change as a gift.  If nothing changed, it would be guaranteed that nothing would become better for us.  What would life be worth if we didn’t have challenges?  How happy would we really be with no struggle and we waited for someone to save us from our mistakes?  We are responsible and the path to a better life regardless of what’s around us, is to put our chins up, shoulders back, thoughts and feelings cleared, determination and take action. There is no other logical choice.

Solutions are to integrate logic, purpose and intuition.

Here is an example.  A reader sent this note.

Gary, I cannot tell you how much I appreciate your clarity plus your common sense approach to life.  I’m not sure which Internet search led me to you but I believe in synchronicity over coincidence.  You preach about eating right.  The day I was diagnosed with breast cancer in February 2014, I started reading and began my 100% organic and immune building, cancer killing foods. By July 2014, the lump has “dissolved” and my oncologist said that I had “exceptional, extraordinary, remarkable” results. Food goes far beyond flavor for me.  It is fuel for my health.

That is inspiration to me.  Rather than blaming junk food, the chemical industry, big Pharma, this reader did something positive and solved the problem.

Merri and I have been developing reports and courses so readers can have a 7 step program to achieve true freedom by creating a purpose in a cynical world.

Here are three of the seven steps we can take to be prosperous and free.

#1: Uncover a passion to be truly free. Gain freedom by providing a service we are passionate about in a positive way.   “Why are we on this earth?”  That is a question for each of us to answer. Rarely can we answer clearly, but one fact is clear, we each need to feel a purpose and we need to act on that feeling.

Since the 70 year problem began in Greece, let’s look there for a solution.  Once upon a time, Greece was the great society and then, the Greek philosopher, Aristotle, reflected on this idea when he postulated that the greatest asset of all is… usefulness.  We are social animals.  Whether in business, investing, with family, friends or strangers… at home or in our travels… when it comes to being valuable… usefulness reigns!

Whatever our path… we need to pave it with usefulness.

Aristotle even defined the ingredients of usefulness as Ethos – Logos and Pathos.

Ethos is ethics… having character or credibility.  Logos is  logic… our ability to communicate via reason.  Pathos is emotion… the really driving passion that shifts what is known… to being what is desired.  If you can emotionally appeal to reason and be believed… your social interaction becomes truly useful.

“Our passion is the driving force that shifts what is known… to being what is desired.”

#2: Have good natural health to be free of the “Secret Charge Master”.  Just as governments hide truth behind “National Security”, big health care businesses hide medical truths behind “Charge masters”.  Most hospital charge masters are secret because big business does not want us to know how much hospital costs have risen.  Motivations beyond our good health, like corporate greed, want to keep us in the dark about health care cost.

Despite rising health care costs, a report from the Centers for Disease Control & Prevention shows that hospitals are the last place we want to be for good health.  One report shows that hospital-acquired infections alone kills 57% more Americans every year than all car accidents and falls put together.

Often, what patients catch in the hospital can be worse than what sent them there.  Governments and health care agencies agree  – antibiotic resistance is a “nightmare.”  An antibiotic-resistant bacteria may be spreading in more hospitals than patients know.  About one in every 25 hospitalized patients gets an infection and a 2013 report from the Journal of Patient Safety showed that medical errors are the third-leading cause of death in the country.

Along with the risk of hospital acquired illness and medical errors, the second huge threat to our well being… is health care costs, especially at hospitals.  This is why charge masters are so often secret.  There are few risks to our wealth that are greater than a hospital stay.

#3: Seek value investments to protect and increase purchasing power without unreasonable risk.  Big businesses represent a threat to our investments.  Near zero interest, over priced stocks and hidden agendas at banks and brokers  have eroded the purchasing power of our hard earned savings.

We cannot trust mainstream media to make our investment decisions.  Many big publishers and media rely on spin provided by big business and government intermediaries to provide sensationalism in the economic news. Drama sells more than news that informs so our daily news on the internet, in the papers and on TV are subject to spin.  Even accurate economic news often presents a misleading picture.  This is why financial news based on core business fundamentals such as price-to-book-value, price-to-earnings and dividend yield are better indicators to follow when seeking investments.

Financial news based on mathematics reflects a more accurate truth.   Math might be boring, but mathematics are much more comparable and harder to misinterpret.  Numbers applied to value do not misinform.

Learn how to survive and profit from spin.   I have just published a report, “Investing in the Era of Cynicism” that reveals the link between hidden information of nearly 70 years ago and how it can affect your wealth now and into the future.  The report shares how knowing about the link may save your savings and your ability to earn and protect your savings and investments in the next two years.   The report reveals the link between hidden information of 70 years ago and how it can affect the economics that surround us now and into the future.  The report shares how knowing about the link may save our savings and ability to earn and protect our savings and investments in the next two years.

#1: Turn your passion into a profitable mission. Make the mission something big, but start it small.

#2: Lead with an adaptable lifestyle. Expect the unexpected and be willing to change.

#3:  Focus on earning with your own micro business first.  Then Invest.

#4: Have a relentless search for value in business, investing and life.

#5: Do not trust any one currency.

#6: Plan for age. Avoid hospitals and public health care.

#7: The seventh step. Well that’s a secret for now that we share in the report.

You can survive and profit with seven steps that reach beyond spin and are effective in this new and rapidly changing cynical state of mind. 

Special FREE Copy of “Mastery” on Kindle or Your Computer

During my 50th anniversary month if you order my report, “Investing in the Era of Cynicism” I’ll send you the online version of “Mastery: A Mission Plan for Reclaiming a Life of Purpose, Fitness and Achievement” FREE.

Order “Investing in a Cynical World Report” delivered online in .pdf  $19.95

Gary


Related Artices

If you enjoyed this article "Surviving a 70 Year Error" you may find these related articles of interest too: