[GJM] #10 John Gelles On The Inner Structure Of TOP (The Optimum Policy)

[Wesley S. Burt]

Dear John Gelles and all of Warren Buffet's idiots,

Again our paths cross and no one comments 
on how closely we approach agreement.  I 
completely share your 19 Oct 2006 assertion 
to lists VOW and cyber-soc that to restore 
our society to good order requires both; a 
subsidy to raise wages, and, cost-plus pricing 
to assure enough production for a sustainable 
prosperity.

Your eloquent post of 22 Oct 2006 expanded 
your subject to include US policy in Iraq, and 
included an expert article by Michael Rubin 
which concluded as follows:
"Exit strategies might seem easy, but--like the 1989 Taif Accords and the
failure to topple Saddam in 1991--they are irresponsible and replete with
long-term consequences. 

What is needed in Iraq is reconsideration of the resources and parameters
conducive to long-term victory, not a repeat of short-term solutions that
will almost certainly fail.
Michael Rubin, editor of the Middle East Quarterly, is a resident scholar
at the American Enterprise Institute.


This item is available on the Middle East Forum website, at
http://www.meforum.org/article/1034
~~~~~ End excerpt from Michael Rubin ~~~~~
Your writing, John, and that of Mr. Rubin 
raises a fundamental question that is not 
being addressed any where in the media 
or on the Internet.  That question is: how 
can the US Establishment hope to provide 
democracy, liberty, and justice to the 
Middle East and elsewhere in the world 
if they do not first provide democracy, 
liberty, and justice to American citizens 
and taxpayers as an example?  The 
numerous US examples of "nation building;" 
beginning with the reconstruction of the 
former Confederate States in 1865 and 
continuing through the Spanish Colonies 
and the 1930s Depression to the present 
occupation of Iraq, can claim "mission 
accomplished" only in the cases of Japan 
and Germany.  In view of our 2981 year 
old Christian principle of "Subsidiarity," 
which proscribes the full capitalization of 
human development, the three decade 
economic miracles of Japan and Germany 
were just that, miracles.
 
But as even Warren Buffet's idiots know by 
now, any subsidy to raise wages above the 
poverty level has been proscribed for 2981 
years; first by the Jews, then by the Catholics, 
then by the Muslims, lastly by the Protestants, 
and presently by the WHIPs in all five (including 
Humanism) of our Western religions.  Only after 
WW-I, The 30s depression, WW-II, and the 
holocaust did Japan and the Euro nations 
adopt subsidies proportioned to the number 
of dependents supported by a worker, to 
enable their three decade long economic 
miracles.  It seems strange to me that of 
our five Western religions only the Roman 
Catholic Church has followed Thomas 
Paine's proposal of a "family wage" in their 
published literature since 1891.  But I never 
hear the "family wage" mentioned by Catholic 
citizens of the United States or Catholic 
members of Congress.  Perhaps we will hear 
more about the "family Wage" as the Holy 
Roman Empire is restored in Europe.

As to cost plus pricing, each of the corporations 
I worked for between 1947 and 1985 (General 
Electric and nine defense contractors) calculated 
a competitive price by adding a 30% of sales 
markup to their direct manufacturing cost.  That is 
to say, a competitive price = Mfg. cost divided by 
0.70 to secure the 30% gross margin required to 
comfortably cover the preproduction costs of 
engineering and development, the fixed costs 
of executive compensation, and a 10% of sales 
average profit from 1947 to 1987 as shown by 
the attached Fig15Hixson.gif.

You are absolutely right, John, when you say:
"If we can perform the engineering feats 
all around us, we can reconcile prices, 
wages and profits. It's not rocket science 
or brain surgery.  It's simple stuff -- and we 
did it (and do it) nearly every time we really 
have to (or perish)."  But equally interesting, 
is the fact that we have been doing it for at 
least a century in the world's private sectors 
to create a seem less global economy with 
laissez faire free markets and free trade that 
works quite well for the private sector 
corporations only, because the national 
private sectors have satisfied the technical 
requirements for free markets.  You are 
right in saying: "the magic of laissez faire 
free markets and free trade is a myth."  But 
the magic has been realized by our private 
sector corporations only; while our national 
governments, with the exception of the Swiss, 
continue to violate the "simple stuff" that 
would enable the magic in our public sectors. 

If we want to bring together people of Faith 
and people of Reason so that issues may be 
decided by forceful majorities, rather than 49-
51 splits of the voting public, we need a better 
conceptual framework than the common Left-
Right arguments.  Such a framework must 
inform the voting public of both our historical 
evolution and those "Laws of Nature and of 
Nature's God" that have remained constant 
while we were evolving.  I have heard it said 
that human nature has not changed over the 
last ten thousand years, so some of the facts 
in our oldest history book must still be valid.

The conceptual framework presented in 
attached Figures 7, 8, and 9 of file Fig7-9k.gif 
has survived twelve years of exposure on the 
Internet, and has not been matched anywhere 
on the Internet or in the Media.  Every one has 
his own sources for verifying the historical 
accuracy of the Whole Divine Law.  But the 
geometric relationship between preproduction 
costs, no load or fixed costs, and variable 
production costs as illustrated in figures 8 
and 9 are the key to stable free markets 
operating with minus 1% inflation and plus 1% 
unemployment, as experienced by Japan and 
Germany during their economic miracles.  The 
increasing workers margin shown in Figure 9, 
as production increases, assures that workers 
will be driven to intense competition instead of 
cooperation, until the fixed costs of subsistence 
are capitalized to the same extent that we have 
capitalized the fixed costs of universal education 
in our public sector.  Just as preproduction and 
fixed costs have been capitalized in our private 
sector corporations since Henry Carter Adams 
explained increasing returns to scale in his 1887 
paper, Relation Of The State To Industrial Action.

Again, John, how can we establish democracy, 
liberty, and justice in the Middle East if we will 
not even discuss restoring it for Americans at 
home?  The US enjoyed stable free markets 
operating with minus 1% inflation and plus 1% 
unemployment from colonial times until the 
1890s as an agrarian nation, so who objects 
to restoring that mode of economic operation 
at home and abroad for an industrial nation?

Kind regards,

Wes Burt
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