posted April 10, 2014
6- The Economy – Encore
It takes two to Tango. I am not talking about dancing; I am talking about the dance of life.
Nature and us, a formidable duo. The question is how do we treat the relationship. Are we handle it with loving tender care or there is evidence of abuse. Nature has been unimaginably generous to us. It requires us to sleep about 8 hours per 24 hours so, the metabolic process can take place, our bodies do the necessary maintenance so to speak. It has provided us with air to breath, food to eat, and water to drink. These needs are basic, fundamental, indispensable for our very survival and they must be met first. Those needs appear at the bottom of Abraham Maslow’s pyramid of basic needs. That’s all nature can do, now we enter the picture, to dance and tango with nature. Are we allowing our bodies to get the required hours of sleep? are we doing enough to not pollute the air we breathe, are we growing and feeding our bodies with nutritious food because we are what we eat, so to speak. Our influence with nature is 51% at the very minimum, we have a controlling interest. What we get is the product of the choices we make and the priorities we set.
Now I would like to add three more basic needs for human survival. Business, Science and Technology plus Medical Advancement. I have just completed defining the “productive sector of the economy”, which feeds and protects the nation.
The Founders of Business, that is companies that make things, Farmers, Scientists and Technologists who are helping companies to make/manufacture things, and Medical Personnel- Pharmaceutical companies who together treat/cure our illness are the true stars.
We are witnessing the financialization of the American Economy, unfortunately. Finance is the tail that wags the dog. It has put a leash on the “productive sector of the economy” and pulls it in which other way but straight. There is a misconception that “money” grows the economy and create jobs. Let me set the record straight. “Money is a dead commodity, dead as a door nail”. Only a successful entrepreneur can breathe life into it. Half a billion to Solyndra and they go bankrupt, that is the Government’s contribution to the economy. How many politicians or bureaucrats have found a company and make it survive and succeed. Steven Jobs and Elon Musk have changed the world with virtually no money from the Government. I am getting ahead of myself. Let’s start at the beginning.
The Universe is expanding at an accelerating rate (dark energy). That means tomorrow will be bigger than today, and today will be bigger than yesterday. If we keep going back in time, we’ll arrive at the birth of the Universe some 13. 7 billion years ago, called the “Big Bang”, according to cosmologists. The term “Big Bang” was coined by Fred Hoyle and it was meant as a derision. He and Albert Einstein hated the notion that the Universe was born and expanding ever since. Both believed in the “Steady State”.
The four fundamental forces of nature, that is gravity, electromagnetism, the strong and weak force were together at the moment of the Big Bang. A trillionth or so of a second after the Big Bang, gravity split causing the Universe to expand faster than the speed of light, (the inflation any Universe) according to Alan Guth. This super rapid expansion trapped the temperature inside, and explains the homogeneous temperature throughout the visible Universe. Then, electromagnetism split and flooded the expanding space time with pure energy. For the next 380,000 years’ light was trapped by the primordial soup where the cosmic annihilation took place by matter and antimatter particles and atoms were born. For every billion or so of annihilation one matter particle survived. These surviving matter particles formed the visible Universe that we today observe. Then, the Universe became big enough to enable light to escape, thus the journey through space time began illuminating the cosmos. What all that has to do with us and the economy? In a word plenty. We are made of star dust, of atoms and atoms are the key to the cosmos. Our life and our actions must mimic, comply with the laws of the cosmos. If we do we benefit, if we don’t we pay a price. In the following paragraphs I will attempt to show our parallel, our relationship to the cosmos.
If we look at any company of any size that has survived and prospers and go back in time we will arrive at the founder, who at a certain point in time had a Big Bang in his/her head about a product or a service. His/her imagination and passion outrun and had overcome any reservations that might holding him/her back (gravity split-inflationary universe). Then, despite every doubt from well-meaning people about the chances of success of their endeavor, they managed to stick to their goal, to persevere and succeed (cosmic annihilation). Founders of companies are creators of tiny, tiny universes. As their companies survive and expand forming company divisions(galaxies), star employees form specialized groups (solar systems) where individual and/or family’s life revolve around it. It requires a powerful energy and imagination to start a company, and the chances for survival are slim, it takes a significant amount of time and effort. Politicians, economists and bureaucrats have no idea how difficult it is, what it takes to found a company and make it grow, make it a success. Whatever they know is academic, superficial and probably half correct. If they only knew how difficult it is to found a company, they wouldn’t burden us with tons of rules and regulations that hampers us to be more productive. I would like to offer the following example to somewhat reflect what I am trying to illustrate.
A farmer wants to plant 5, 000. 00 acres with apple trees (a product). He needs to bring irrigation to his land. The government requires him to get a permit, an arduous process, how to lay out the pipes, what specs to meet. The farmer protests, saying I know what to do, I’ve done it before. Yes, but we must be seen as protecting the consumer, we want to make sure the consumer gets good quality product (apples). The farmer says if I manage to irrigate my land the consumer will get good quality apples, but I can’t find technicians to lay out the pipes (currently there are over 3 million tech openings that go unfilled). The government suggests that he hires 5, 000. 00 people to water the trees with water buckets. That way the farmer helps to bring down the unemployment. That will not be cost effective the farmer counters. Yes, the government says but it will be politically effective especially with the mid-term elections coming up.
Anyway the government says, we’ll take a look at your situation after the elections. It will be too late by then, the farmer protests so, I will hire tech talent from overseas. Oh NO, the government says, we can’t let foreign workers take American jobs. Well, you get the idea what the “productive sector of the economy” has to deal with, but in a much broader and diverse context.
There is another fundamental way we are connected to the universe, and that is balance and symmetry in the following way. The most stable atom in the universe is the atom of the iron. Nature has decreed that its 26 protons and its 26 neutrons balance each other perfectly. The universe is in a constant flux trying to achieve the stability of the atom of the iron. Atoms that are lighter than the atom of the iron fuse together(fusion), trying to become more like the atom of the iron. Atoms that are heavier than the iron atom naturally break up (fission), becoming lighter than the atom of the iron and fuse together, trying to achieve the stability of the atom of the iron. This process is constant from the dawn of time.
Balance brings stability, predictability, you can plan ahead, calmness, happiness and a sense of achievement. Are you listening Congress and Mr. President? The richer nation ever, to be a debtor nation is incomprehensible, kicking the can down the road is not the right thing to do. Balancing the budget is.
Balance is not enough; it must be combined with symmetry. A pound of lead balance with a pound of hey, but from esthetic point of view is an eyesore. Symmetry contains balance plus proportionality, fairness, it projects beauty, positive emotion and self-esteem. Symmetry is easy on the eye; we fall in love with anything symmetrical.
Well, I can talk for hours nonstop about the economy, but I better stop for now. My next blog will be dealing with taxation, the great impediment to economic activity and growth. America, if you think some of my ideas are indeed out of the box or even out of this world, wait and see what I will propose about taxation.
Until then, I wish everyone a hopeful day.
Paul Pantelis Rachmanides