Wisdom from the 42nd Page

It's Only Too Late If You Don't Start Now

On the forty-second page of “It's Only Too Late If You Don't Start Now: How to Create Your Second Life at Any Age” author Barbara Sher wrote (some emphasis added):

Exercise 5

Another glimpse into your future

All right, I'd like to ask you to do something tricky.

Fantasize your life without any narcissistic desperation at all. It's almost impossible to do for more than the briefest moment, but you can get an idea if you imagine that you don't have the slightest interest in being anybody's favorite or any kind of star. See if you can catch a glimpse of how that would feel. Then ask yourself these questions.

1. What do you think you'd have done differently in your life if you'd always felt that way?
2. What would you do differently now?
3. What would you stop doing?

Give it some thought for a few minutes.

Can you see how different your life would be? Well, that's what you can expect in your future.

But first, you need a little deprogramming.

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(Dell Publishing Company, April 1999. Paperback, 352 pages. ISBN: 0440507189; EAN: 9780440507185.)

The Mirage of Social Justice

On the forty-second page of “Law, Legislation and Liberty, Volume 2: The Mirage of Social Justice” author F. A. Hayek wrote (emphasis added):

this does not exclude the possibility that we may later discover cases to which, if we had not commited ourselves, we should wish not to apply the rule, and where we discover that we had thought to be quite just is in fact not so; in which event we may be forced to alter the rule for the future. Such a demonstration of a conflict between the intuitive feeling of justice and rules we wish also to preserve may often force us to review our opinion.

We shall later have to consider further the changes in the recognized rules which will be necessary for the preservation of the overall order if the rules of just conduct are to be the same for all. We shall then see that often effects which seem unjust to us may still be just in the sense that they are necessary consequences of the just actions of all concerned. In the abstract order in which we live and to which we owe most of the advantages of civilization, it must thus in the last resort be our intellect and not intuitive perception of what is good which must guide us. Our present moral views undoubtedly still contain layers of strata deriving from earlier phases of the evolution of human societies—the small horde to the organized tribe, the still larger groups of clans and the other successive steps toward the Great Society. And though some of the rules or opinions emerging in later stages may actually presuppose the continued acceptance of earlier ones, other new elements may be in conflict with some of those of earlier origins which still persist.

The significant of the negative character of the test of injustice

The fact that, though we have no positive criteria of justice, we do have negative criteria which show us what is unjust, is very important in several respects. It means, in the first instance, that, though the striving to eliminate the unjust will not be a sufficient foundation for building up a wholly new system of law, it can be an adequate guide for developing an existing body of law with the aim of making it more just. In such an effort towards the development of a body of rules, most of which are accepted by the members of society, there will therefore also exist an 'objective' (in the sense of being inter-personally valid, but not of universal—because it will be valid only for those other members of the society who accept most of its other rules) test of what is unjust. Such a test of injustice may be sufficient to tell us in what direction we must develop an established system of law, though it would be insufficient to enable us to construct a wholly new system of law.

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(University of Chicago Press, October 1978. Paperback, 210 pages. ISBN: 0226320839; EAN: 9780226320830.)

The Limits of Power

On the forty-second page of “The Limits of Power: The End of American Exceptionalism” authors Andrew Bacevich wrote (emphasis added):

technology converted to military use by talented, highly skilled soldiers) could sustain quantity (a consumer economy based on the availability of cheap credit and cheap oil).

Pledges of benign intent concealed the full implications of Star Wars. To skeptics—nuclear strategists worried that the pursuit of strategic defenses might prove "destabilizing"—Reagan offered categorical assurances. "The defense policy of the United States is based on a simple premise: The United States does not start fights. We will never be an aggressor. We maintain our strength in order to deter and defend against aggression—to preserve freedom and peace." According to Reagan, the employment of U.S. forces for anything but defensive purposes was simply inconceivable. "Every item in our defense program—our ships, our tanks, our planes, our funds for training and spare parts—is intended for one all-importantant purpose: to keep the peace."

Reinhold Niebuhr once observed that "the most significant moral characteristic of a nation is its hypocrisy."²³ In international politics, the chief danger of hypocrisy is that it inhibits self-understanding. The hypocrite ends up fooling mainly himself.

Whether or not, in 1983, Ronald Reagan sincerely believed that "the United States does not start fights" and by its nature could not commit acts of aggression is impossible to say. He would hardly have been the first politician who came to believe what it was expedient for him to believe. What we can say with certainty is that events in our own time, most notably the Iraq War, have refuted Reagan's assurances, with fateful consequences.

Illusions about military power first fostered by Reagan outlived his presidency. Unambiguous global military supremacy became a standing aspiration; for the Pentagon, anything less than unquestioned dominance now qualified as dangerously inadequate. By the 1990s, the conviction that

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(Metropolitan Books, August 2008. Hardcover, 206 pages. ISBN: 0805088156; EAN: 9780805088151.)

Beast and Man

On the forty-second page of “Beast and Man: The Roots of Human Nature” author Mary Midgley wrote (emphasis added):

should have put an end to this convenient way of thinking. They did, however, and as a the Greek notion of the gods grew steadily more dignified and noble, the problem, "Whom can I blame for my faults?" again became pressing. I do not think it is any accident that Plato, the first Greek who consistently wrote of the gods as good, was also the first active exponent of the Beast Within. Black horses, wolves, lions, hawks, asses, and pigs recur every time he mentions the subject of evil; they provide the only terms in which he can talk about it. This is not an idle stylistic device: there is no such thing in Plato. His serious view is that evil is something alien to the soul; something Other, the debasing effect of matter seeping in through the instinctive nature. This treacherous element clearly cannot be anything properly human; it must be described in animal terms—and those of no particular animal at that, since all particular animals have their redeeming features, but a dreadful composite monster combining all the vices: in short, the Beast Within, whose only opponent is the Rational Soul. Certainly good feeling is sometimes invoked too, and given body as a Good Beast, but its goodness is supposed to consist in its obedience to Reason, not in its contributing anything itself. The white horse willingly obeys the charioteer and helps him to restrain the black;²³ it is no Balaam's Ass that hazards its own suggestions. Accordingly the feeling named in this connection are shame, ambition, the sense of honor, never, for instance, pity or affection, where the body might be held to make good suggestions to the soul. Plato's map excludes such a possibility. This exclusion has been both morally and psychologically disastrous. Fear of and contempt for feeling make up an irrational prejudice built into the structure of European rationalism.²⁴

Aristotelian and Kantian Beasts

Aristotle, though in general he was much more convinced of man's continuity with the physical world than Plato, makes some equally odd uses of the contrast between man and beast. In the Nicomachean Ethics (1 7) he asks what the true function of man is, in order to see what his

23. Plato, Phaedrus 254–257
24. I shall develop this point further in chap 11.

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(Routledge, October 2002. Paperback, 416 pages. ISBN: 0415289874; EAN: 9780415289870.)

The Revolution

On the forty-second page of “The Revolution: A Manifesto” Represenative and presidential candidate Ron Paul wrote (emphasis added):

One mechanism that has strengthened it is the executive order, an instrument by which presidents have exerted powers that our Constitution never intended them to have. An executive order is a command issued by the president that enjoys his authority alone, not having been passed by Congress. Executive orders can have legitimate functions. Presidents cancarry out their constitutional duties or direct their subordinates by executive order, for instance. But they can also be a source of temptation for ambitious presidents (am I being redundant?), since they can always try to get away with using them as a substitute for formal legislation that they know they cannot get to pass. He can therby circumvent the normal, constitutional legislative process.

Executive orders were rare in the nineteenth century; for a president to issue even several dozen was unusual. The first twentieth-century president to serve a full term, Theodore Roosevelt (who served two, in fact), issued over a thousand. Executive orders continue to serve as a potent weapon in the president's arsenal.

Congress has sometimes been complicit in presidential abuses of executive orders, either by giving express sanction to the president's action after the fact or ignoring the abuse of power altogether. This latter course is sometimes pursued when congressmen happen to favor the president's course of action but do not want to have to associate themselves with it (perhaps because it is controversial or politically sensitive). With executive orders, presidents can commit our troops to undeclared wars, destroy industries, or make unprecedented social-policy changes. And they remain unaccountable because often these actions occur behind the door of the Oval Office, are distributed without notice, and then executed in

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(Grand Central Publishing, April 2008. Hardcover, 173 pages. ISBN: 0446537519; EAN: 9780446537513.)

Empire of Debt

On the forty-second page of “Empire of Debt: The Rise of an Epic Financial Crisis” authors William Bonner, & Addison Wiggin wrote (emphasis added):

of property rights or the division of labor. Things got simpler, more brutal, mean, and nasty; lives were shortened. It was not a time to be in the insurance business.

What caused the periodic invasions no one knows. Perhaps good weather out on the plains produced population explosions that caused the nomads to expand. Perhaps bad weather caused famine that sent hungry mouths in search of someone else's meat and grain. Historians don't know. But fear of the barbarians from the steppes has been a chronic theme of Western history—particularly among the Teutonic tribes that were most exposed to them.

The Great Khan

Perhaps the most successful empire builder of all time was a leader of one of those periods of barbarian expansion—Genghis Khan. Since the time of the Romans, it has been fashionable to put a civilized mask on your face when you put the imperial purple on your back. You are bringing religion to the heathen. You are bringing civilization to the indigenes. You are bringing culture, education, and technology. Even Alexander the Great thought he was doing the world a favor. Conquerors do not like to admit—even to themselves—that their instincts are no different from those of barbarians. They have better table manners. But they are subject to the same urges as Genghis or Attila. Bloodlust, prestige; power, status—who can deny that it would be a thrill to conquer a whole city or an entire nation? But empire builders typically put on the imperial purple like a set of angel's wings, leap off the balcony, and come down with a thud.

Genghis Khan needed no mask. The man showed his face as it really was. He united the Mongolian tribes in about 1129 and beginning with a series of attacks on northern China, he embarked on a spectacular epic of mass slaughter and rapine from which two empires were derived. One of them, the Ottoman Empire, lasted until the end of World War I. The Mongol hordes overran northern China, Tibet, Persia, nearlly all of central Asia and the Caucasus, Korea, Burma, Vietnam, Anatolia, and much of Russia. They attacked India and eventually, in 1526, Babar, one of Genghis Khan's descendants, set himself up as emperor of the place. In China, too, Genghis's descendants founded the Yuan dynasty, which ruled until nearly the fifteenth century.

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(John Wiley & Sons, September 2005. Hardcover, 370 pages. ISBN: 0471739022; EAN: 9780471739029.)

Crash-Proof

On the forty-second page of “Crash-Proof: How to Profit from the Coming Economic Collapse” author Peter D. Schiff, wrote (emphasis added):

The GDP started out as the GNP (gross national product) during World War II, when it was used to measure wartime production capacity. It was never intended to be used as a measure of the country's economic well-being, and its shortcomings are laughably numerous.

By definition, the GDP is the sum total of the monetary value of all final goods and services bought and sold within U.S. borders in a given year. The distinction between GDP and GNP, incidentally, is that GDP doesn't care about the nationality of the producer. It includes everything transacted within our borders, even BMWs manufactured in North Carolina. (GNP, which is almost never used, would exclude foreign manufacturers in the United States and include goods and services produced by U.S. firms operating abroad.) GDP this includes the totality of consumer, investment, and government spending, plus the value of exports, minus the value of imports.

One big problem with GDP, although represented as a measure of economic health, is that it makes no effort to distinguish between transactions that benefit the nation's health and those that subtract from it. Destructive activities are included as well as productive activities. The GDP may not have been designed to measur economic well-being, but since it is used for that purpose, everything it includes—every monetary transaction that takes place anywhere and anytime within its time frame—is, by definition, progress and a contribution to the nation's economic health. Thus Hurricane Katrina added to the GDP despite tragic losses to the populace, as do other negative expenses, such as crime prevention costs, expenses incurred in divorces, medical costs, and national defense expenditures.

Another serious shortcoming is that it ignores everything that doesn't take place under the rubric of monetary trade. Money has to change hands. Functions performed in running a household, for example, are excluded because no money is

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(John Wiley & Sons, February 2007. Hardcover, 272 pages. ISBN: 0470043601; EAN: 9780470043608.)

Saving Capitalism from the Capitalists

On the forty-second page of “Saving Capitalism from the Capitalists: Unleashing the Power of Financial Markets to Create Wealth and Spread Opportunity” authors Raghuram Rajan & Luigi Zingales wrote (emphasis added):

on firm value. There are ways of ruiling this explanation out. When a company is included in the S&P 500 index, many mutural funds simply replicate the index and invest in the company. The higher institutional ownership in these "index" companies does not reflect the value judgment of institutional investors but simply the application of a mechanical rule. Even institutional ownership driven by such mechanical considerations has a positive effect on firm value.

More evidence that institutional ownership is beneficial comes from examining the consequences of regulatory changes.³¹ Before 1992, if ten or more investors in the United States wanted to discuss the performance of a particular company, they had to file a report with the Securities and Exchange Comission, detailing the purpose of, and participants in, the discussion. These requirements made it onerous for institutional investors to coordinate their actions. In 1992, this rule was done away with. The relationship between institutional shareholdings and firm value is twice as large after 1992 as bfore, consistent with the idea that institutional investors force companies to be better managed. That institutional investors help reduce waste in companies flush with cash is bolstered by the finding that the relationship between institutional shareholding and firm value is especially strong in firms that generate more free cash flow.

For mature firms, therefore, financiers play the role of policemen and undertakers, preventing the theft of resources and burying the dead. In other instances, however, they play the more creative role of midwife. Young firms need a very different kind of assistance than established, mature firms. Young firms have tremendous growth opportunities, and in an economy with good laws and decent accounting, most managers of young firms ahve the incentive to succeed (rather than steal or waste investors' money). Top management runs the company in trust, not just for shareholders but also for junior management, which expects to succeed top management. The rewards for a growing firm come not from misappropriating current free cash, which is meager, but from the prospect of running a larger, more profitable firm. So managers can be relied upon to keep obvious wrongdoing by other members of the management team in check.³² The reason management needs close monitoring is that management may be inexperienced and headstrong and may unwittingly do the wrong thing.

Consider how venture capitalists (VCs) help inexperienced manage[ment]

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(Crown Business, February 2003. Hardcover, 384 pages. ISBN: 0609610708; EAN: 9780609610701.)

Secrets of the Temple

On the forty-second page of “Secrets of the Temple: How the Federal Reserve Runs the Country” author William Greider wrote (emphasis added):

and his home mortgage payment does not increase at all. The Federal income tax becomes somewhat more onerous, but this effect is far outweighed by the benefits of homeownership. The average middle-income home renters does not fare as well, but overall he nearly keeps up with inflation.

By contrast, Minarik found that upper-income households, then defined as those above $37,500 in income, approximately the top 10 percent on the income ladder, were "left substantially worse off." Their salaries kept pace with inflation too, but their assets were eroded. "The wealthy have no safe and profitable store of value in times of inflation," he explained.

A similar study by economist Edward N. Wolff of New York University measured the effects on wealth caused by the first lag of the modern inflationary spiral, starting in 1969 and ending with the recession of 1974. During that period, Wolff reported: "Inflation acted like a progressive tax, leading to greater equality in the distribution of wealth."

Minarik found that inflation's impact on two other groups—the poor and the elderly—was more ambiguous but also more benign than popular political opinion assumed. Generally, it was believed that these two groups suffered most severely from inflation because they lived on fixed incomes. Minarik found that this was not true. With a lag, government benefit programs for low-income families, those under $9,000, generally increased in time to keep up with prices. Many poor people were sheltered from rising costs in two sectors where prices were soaring—health and housing—because of Medicaid and public housing. "Over a short period, low-income households are indeed the most adversely affected when prices increase, simply because they have the least maneuvering room in their budgets," Minarik wrote. "But over longer periods their incomes tend to catch up with prices." The poor were still poor, of course, but inflation did not make them worse off compared to others.

The elderly were partially protected too. Social Security benefits were indexed to the inflation rate, automatically increasing the monthly checks periodically to catch up with prices. Among the elderly, Minarik found, the ones hurt most "are those who rely most heavily on private pensions or their own savings. The notion of the Social Security recipient as the chief loser in inflation is largely incorrect...."

The central explanation for this reversal of fortunes—the many gaining at the expense of the few—was homeownership. Most American families, two-thirds of them, owned only one real asset of any

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(Touchstone Books, January 1989. Paperback, 798 pages. ISBN: 0671675567; EAN: 9780671675561.)

The Best-Laid Plans

On the forty-second page of “The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future” author Randal O'Toole wrote (emphasis added):

of money for fire suppression each year. When fire costs exceeded this amount, the Forest Service was expected to borrow the money from its Knutson-Vandenberg (K-V) fund and then repay it in future years when costs were less than the annual appropriation.

The Forest Service responded with many cost-cutting measures, including allowing forests to let natural fires burn instead of suppressing every fire and changing strategies from suppressing fires on every acre to containing fires within natural boundaries. Average annual fire costs fell dramatically for several years. However, droughts in 1987 and 1988 forced the Forest Service to severely deplete the K-V fund. So in 1990, Congress gave the Forest Service a supplementary appropriration of nearly $280 million to replenish the fund.⁴

Congress's action effectively restored the blank-check mentality and reduced the incentive for forest managers to control costs. An internal Forest Service review in 2003 found that fire managers continued to act as though "suppression funds [were] unlimited." They spent millions of dollars on little-used rental cars, unnecessarily purchased upscale camping gear for crews, and paid exorbitant rates for firefighting equipment.⁵

Such free spending offers many opportunities for corruption. In 2006, a Forest Service purchasing agent in Oregon was discovered to have paid her boyfriend more than $640,000 in firefighting funds. No one in the agency missed the funds; she was caught only after someone tipped off the local district attorney that the couple was gambling away unusually large amounts of money.⁶

In 2000, a prescribed fire lit on the Bandolier National Monument escaped control and swept across the Sante Fe National Forest into Los Alamos, where it burned hundreds of homes. Congress responded by increasing the Forest Service's budget by a whopping 38 percent and asking the Forest Service and other federal land agencies to write a national fire plan.

The Forest Service long ago agreed with private landowners that some forests benefit from frequent light fires. But not all do: while 85 percent of the mostly private forests in the South need frequent fires, only about a third of forests in the West, where most federal lands are located, fall into this category. Without making any effort to determine where the money would be most effectively spent, the National Fire Plan simply asked for huge appropriations for treating forests to reduce fire hazards.

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(Cato Institute, September 2007. Hardcover, 416 pages. ISBN: 1933995076; EAN: 9781933995076.)