Today, we face a presidential election in which neither candidate has explained how they plan to finance their respective plans to “Restore the American Dream.” The specific issue is the need for accountability regarding trillions of dollars borrowed during a time of growth (3% Gross Domestic Product, or GDP) and record tax receipts.

Today, the United States is engaged in trade wars with China, Russia, Iran, and North Korea. We are in technology wars with China, Russia, and Iran. We are in a political influence war with Russia and China. We are involved in a sanctions and tariffs war with Russia, China, and Iran. Moreover, we are arming and thus participating as proxies in two shooting wars: one in Gaza and Lebanon, and the other in Ukraine and Russia.

Aggression, among all animals, is an innate response to stress. Without stress, there is no life. In humans, stress can be internalized, leading to depression, or externalized through aggression, either productively or destructively. The economic and social aspects of human life require productive outlets for aggression to acquire food, water, and shelter. Open economic systems provide opportunities for productive aggression and foster hope.

Malthus, an English economist and demographer, proposed in 1798 that the human population would grow faster than the food supply. His evolutionary theory sparked debates about birth rates, sterilization, and moral restraint.

BF Skinner theorized that a stimulus will elicit a response, which, when reinforced, is repeated. By having rats press a lever in a Skinner box to get food (a pellet), he determined that to maximize the rats' lever-pressing (work), the reward (the pellet) should be given on a variable schedule, in no predictable pattern, from 1958 to 1974.

In 1969, Mckenna, a psychology professor at William and Mary, established a “token economy” for backward schizophrenics at Eastern State Hospital. The token economy allowed patients to prepare food, assemble and sell clothing, and sell knick-knacks. The patients learned to work and were paid with Monopoly money.

The foundation of all our birth rights outlined in the Declaration of Independence as well as the Constitutions Bill of Right’s rest on our Freedom of Speech, the elemental right.

The Freedom to Speak has been challenged and arguably abused by certain politicians and administrations, in our nation’s history, both on the left and the right.

In an open economic system, the unfettered price of money will have a positive value and this value can be measured by the interest rate associated with it. The interest rate will be the sum of the existing inflation rate (I) plus some positive time value of money (pv). When risk ( r) of repayment exists the Price of Money = I + (pv) + r. The Price of Money is usually conceived of as opportunity cost in a near riskless loan.  We use 2% annually as the time value of money for the almost riskless Federal Funds Rate, an overnight loan from the government to member banks.  With regularity when central bankers wish to stimulate an economy, they will artificially lower interest rates they control or believe they can affect.  The Federal Funds Rate referred to hereafter as “FFR” is the interest rate of choice. This process often artificially discounts the price of money. Prolonged periods of discounting the Price of Money may have derogatory effects societies’ wealth and welfare, not contemplated by the policy initiative. If the discount is so great that the interest rate falls below the inflation rate, the real interest rate becomes negative. A negative real interest rate means that the central bank is valuing loans to member banks below zero percent. A negative real interest rate means the Federal Reserve is paying banking institutions to borrow from the Fed. In that case, money no longer has a positive value.

In introductory Money and Banking the first thing we learn is that fiat money has three characteristics: 1) It is a unit of account, it allows us to form accounting and tax principles and allows us to compare value between different items. 2) It has a transaction value, rather than exchanging objects directly money is an intermediary. 3) It is a store of value because unlike crypto or gold it has a price and the price of fiat money is the Interest Rate.

What is Labor Productivity? To have a basic understanding we have to look at how its derived.  Labor Productivity is obtained by dividing total output of the economy by the total hours worked then comparing the rough number to see if it went up or down and by what percent. Gross Domestic Product (GDP) is used as a proxy to measure the total output of all goods and services, and hours worked is used as a proxy to measure Labor Cost. The Bureau of Labor Statistics (BLS) releases the measure of non-farm Labor Productivity quarterly, and annually. This is a simplification of the actual formula; however, it shows the inverse relationship between adding costs (more labor hours) and lower productivity; or conversely reducing costs (fewer labor hours) and adding productivity given a constant output. You get a rough number that you compare with prior periods to see the percentage change, the higher the percent increase the more social wealth increased. From 1947-1967 Labor Productivity increased at the rate of 3.2% a year. After WWII the country was on a growth spurt. After 1967 there have been some significant moves, both down and up in Labor Productivity, which we will briefly discuss but the average growth since 1967 has been 1.5% a year.

The growth in our nation’s economic productivity for the decade that spanned 1995 through 2005 averaged approximately 2.7% per annum, as estimated by the Federal government. This is an extraordinarily high growth rate for productivity. The average for the preceding two decades was approximately 1.7% per annum. Last week our government revised the productivity number for 2006 down to 1.6%, a decline of a bit more than an absolute 1% from the preceding decade’s average.  This new figure raises the important question of whether the most recent number indicates a long-term drop-in productivity growth or merely a cyclical decline in an ongoing high-productivity environment. To know the answer, we must discuss the underpinnings of the recent period of high productivity growth, and then determine if they are still in place.

All market participants are speculating about the after effects of the feds interest rate tightening. All sorts of credentialed academic economists are commenting when rates will be cut? While the feds quiet manipulation of the money supply goes unnoticed when the treasury offers debt and instead of finding a buyer the Federal Reserve prints the money to pay for it that is what I call (“The Self Licking Ice Cream Cone”).  The fed has only two tools, short term interest rate manipulation, which gets almost all the attention and the addition and subtraction of money from our system (the Self Licking Ice Cream Cone), measured by the bonds and mortgage-backed securities the fed holds on their balance sheet does not get much attention. The Federal Reserve Balance Sheet has grown from $800 billion when Ben Bernanke took office in February of 2008 to $7.224 trillion on July 11, 2024. Yet the Economist Community is busy cackling about the interest rate. Many have criticized the Federal Reserve for this or that about interest rates but few have given the over 900% growth in the fed’s balance sheet its deserved attention.  

This paper will look at the likelihood that illegals, some of whom are awaiting hearings and a significant number that are undetected have been improperly placed on voter rolls in violation of Federal law. Let’s try to answer the questions of how, where, when and why this influx of illegal aliens may be a significant presence on our voter rolls?  Finally, we will make some comments on what the likely magnitude, scope and frequency of voter roll penetrations by illegals might be and what should be done about it.

Since Obama came into office in 2008, Medical costs as a percent of our gross domestic product (GDP) have risen sharply to 17.3% of GDP in 2022 or $4.5 trillion with a per person expense, $13,493 (Statista). In 2023 with a 5.5% increase in costs and a GDP of $27.36 trillion, medical costs have increased to $4.84 trillion dollars; an expense of $14,423(per person), rising to  17.7% of GDP. On Nov. 6, 2019, The Center of Budget and Policy(gov.) concluded “the expansion of Medicaid saved at least 19,200 adults age 55-64 from 2014-2017.” US healthcare, while significantly increasing in expense, has suffered declining live expectancy this century, why?  Yet despite dramatically increased expenses, longevity and many important medical metrics have declined and been outpaced by our peer group including infant mortality, maternal mortality after childbirth, cesareans and obesity in America according to CDC. Why and what can be done?   

Today a political debate rages over the entitlement of nationalized medical care for the 20 percent of the population who is not covered by some form of Federal or private medical insurance.  Moreover, certain states are exploring legalizing statewide medical coverage and in that regard are watching Massachusetts, who recently passed a law requiring medical coverage and is presently sorely over budget, in its implementation.

These debates, discussions and legislations have lead to broad disagreements over the efficacy of whether or not state sponsored medical coverage is an entitlement, a right, of all citizens? It clearly was not mentioned in our Constitution.

Our children are small and naive but we love them, therefore we must have guard rails to guide them through their education. For the first 200 years of our history the classroom teacher has been an important guardian of the guard rails that guide our children.   In Loco Parentis is Latin for an adult parenting in the absence of the parents.  Although not a law this was accepted by parents, administrators and unambiguously communicated to the child. Parenting was an ethical believe shared throughout America. Neighborhood adults would parent young adults and children in the absence of the parents. Parents had numerous methods of disciplining their children, that was considered family business. Most parents accepted the schoolyard and neighborhood umbrella of absentee parenting, even if it included reasonable punishment for bad behavior because it helped parents form guiding guardrails for societies younger members.   

"If I am brutally honest, the only realistic way I see emissions falling as fast as they need to, to avoid catastrophic climate breakdowns, is the culling of the human population by a pandemic with a high fatality rate," wrote Bill McGuire, professor of Geophysical and Climate Hazards at the University of London. Dr. McGuire also helped author a report for the Intergovernmental Panel on Climate Change (IPCC) and was on the Scientific Advisory Group for Emergencies (SAGE) advising the British government during Covid. [Reported in News Nation by Dowling, May 13, 2024.]

Liberty is not simply a state of mind. For people to enjoy liberty, they must be free to act. Coercion, is the enemy of liberty. We create governments to protect our liberty from being impinged on by others. Exercising freedom requires personal acceptance of responsibilities and consequences. Freedom only exists when individuals can act on choices to incur a perceived benefit at a perceived cost.

Our social mores serve as ethical guardrails that steer our focus and behavior. What are our social mores? First and foremost is the belief that human life is special, that we are more than mere material, more than sophisticated animals. As special forms of life, we Americans, uniquely, were afforded special rights that trumped all laws. Our social mores stemmed from over 2,000 years of Judeo-Christian morality. Ethical guardrails formed to keep us focused on hope and opportunity. Ethical guardrails, based on social mores, are not necessarily laws, but rather moral beliefs held by a majority of citizens. Traditionally, these guardrails were administered by and largely protected and guided the sanctity and political power of the family. Today, they are being dismantled.

Comparative Advantage is an economist’s term that usually refers to the price advantage a foreign company has over a domestic one. The advantage typically manifests in a lower price and/or higher quality in a product or service offered. “Comparative Advantage is an economy’s ability to produce a particular good or service at a lower opportunity cost than its Trading Partners.” (definition from Investopedia) Taking advantage of Comparative Advantage expands our wealth and welfare.

The citizens, both voters and taxpayers, of Ocean City are often told that they will lose services if the Government doesn’t collect: 1) plumbing fixture charges, 2) water bills, 3) city tax on cable service bills, 4) excessive property taxes [up 50% after inflation in the last ten years], 5) excessive parking meter fees, 6) room taxes, and 7) other licenses and fees (like energy code and noise ordinance requirements) that add to our cost of living. This raises the question of “what government actions are truly public goods?”

I had no plan to write this piece prior to reading two of this week’s articles in Ocean City’s recently combined papers. One dealt with the present ethical quandary of the town, while the other highlighted the heroic moral certitude of a courageous act. None of us are perfect, but we expect more from our public officials and trust that they are representing our interests. The pier deal serves as a good example of unethical practices by the Mayor and Council and may add clarity to the current debate.