Light Bulb Over My Head

Self Improvement / Intellectual

The older I become, the more I think about the power of ideas and where they come from.   Ideas, as everyone knows, have consequences.  Ideas are probably the most powerful things in all the world.  Just look at the power of the idea of freedom in the Middle East that is taking place right now. 

A couple of weeks ago I was watching one of my favorite shows, No Reservations: Anthony Bourdain.  In this episode he was traveling through Cambodia.  Mr. Bourdain, being a chef,  usually talks to locals about their food, how it is prepared, and what ingredients they use.  He will also discuss with them their culture, traditions, and beliefs.  However, during this episode he delved deep into their history.  It was during this segment that I started contemplating the power of ideas. 

In the early to mid 70's Cambodia was ruled by the the Khmer Rouge.  The Khmer Rouge was the ruling party who's beliefs go back to Marx and Communism.  Here is a short history of the Khmer Rouge:

Khmer Rouge (kəmĕr' Roze), name given to native Cambodian Communists. Khmer Rouge soldiers, aided by North Vietnamese and Viet Cong troops, began a large-scale insurgency against government forces in 1970, quickly gaining control over more than two thirds of the country. The strength of the Khmer Rouge rose dramatically from around 3,000 in 1970 to more than 30,000 in 1973, enabling most of the North Vietnamese and Viet Cong troops to withdraw.

In 1975 the movement, led by Pol Pot, overthrew the Cambodian government, establishing "Democratic Kampuchea." The new government carried out a radical program of evacuating cities, closing schools and factories, and herding the population into collective farms. Intellectuals and skilled workers were assassinated, and a total of perhaps as many as 1.5 million died, inclusive of starvation and forced marches. In 1979, after increasing tensions with Vietnam, Vietnamese troops invaded, aiding a rival Communist faction to depose the Khmer Rouge government. The Khmer Rouge, however, continued to field an army of c.30,000 near the Thai border and retained UN recognition as the official Cambodian government.  (source http://www.answers.com/)

What would influence people to kill millions of their countrymen?  What could possibly make them want to radically change the way they lived which is counter to human nature? You guessed it.  It was a terrible, evil, and vile idea that had it's roots back to the 1800's.

Ideas can be the catalyst for national and personal change. We have seen this throughout history.  All it takes is a spark.  Here is what I propose:

 National idea+Balanced budget and paying off the National Debt
In the early 60's President Kennedy issued a proclamation about putting a man on the moon by end of the decade.  What if our country could be inspired to balance the Federal budget and to payoff the National Debt? Yes I know, we are looking at $14 trillion.  In order to do this it would take someone to put forth a clear vision and idea to make it happen. What would make it difficult would be that this leader would be out of office before it would happen.  I think it could happen.  JFK was gone nearly six years after the landing. 

Personal ideas
As I explained in an earlier blog, my family became debt free recently.  That idea came from a book The Millionaire Next Door  and was strengthened by listening to the Dave Ramsey Show. Before reading this book my worldview of personal finance was quite different.  I had a car payment, credit cards, and thought nothing of my net worth.  What's even worse, I focused on my credit score more than my 401k.  Once again, an idea changed the way I saw things. 

My change in thinking in regards to personal finance has me considering the way I think about other areas of my life.  I remember about six years ago my career path took a sudden and wonderful change for the better.  This took place because someone presented me with an idea that I had never considered.  If we can get past the limits that we set upon ourselves, how different things could be. 


A couple of years ago I read a book that has become one of my favorites, Think and Grow Rich by Napoleon Hill.  This is a very interesting book that has absolutely nothing to do with getting rich quick.  Mr. Hill said "the most powerful instrument we have in our hand is the power of our mind."  Therefore, be careful what you think, it just might come true.

I'm Depressed

Intellectual/Self Improvement

Review of The Great Depression: A Diary

I thoroughly enjoyed this book.  While reading it, I was amazed at the similarities between the 30's and our present dilemma.  Here is a quick synopsis of the book and what the author thought:


1. The government has no idea what stimulates the economy.

2. Americans in bad times, always believe better days are around the corner

3.  Government intervention may have hurt the recovery both in the Depression and the Great Recession.

4. It's best to stay out of debt, have an emergency fund, have some capital saved up.  Having capital saved will allow an investor the opportunity to invest when prices are discounted.  Prices for stocks, real estate etc. are usually driven past the point of natural supply and demand during boom and bust cycles.  Buffet said it correctly, "Be fearful when everyone is greedy, and greedy when everyone is fearful."

5.  During calamities, natural and otherwise, Americans are generous and helpful to their fellow countryman.

6. Beware of the "intellectuals" who give advice to those in power over us.  Roosevelt had his brain trust that was made up of university economists. President Obama has his as well.  These are the same people that came up with the stimulus package and the universal health care plan. Give me a guy that has run a successful hot dog stand and that has met a payroll any day.  Alright, not all intellectuals are bad.  I do like Art Laffer and Jude Wanniski and have read a couple of their books and felt like they understand how the real world works. 

The old cliche is correct, "Those who don't pay attention to history are bound to repeat it."  The author took this saying under advisement and read all he could about past recessions and depressions.  We and our elected officials should do the same.

Feelin' Sort of Bookish

Intellectual/Self Improvement Goal

This is my first "official" post since setting my goals for the year.  As I mentioned in my reasons for setting up this blog, I will from time to time write about my progress and submit the things I have learned along the way.  Additionally, I will reference the goal to which it is related.

In the Intellectual arena I have been reading a book, The Great Depression: A Diary.  It is a wonderful book that I received for Christmas.  The book was developed from the diary of a man who lived and worked during the Depression.  I guess you could say it was his blog. 

The book chronicles his thoughts about what was taking place in Ohio, the United States, and the world. It is fascinating and at times I can't put it down.  It is amazing how those time mirror these.  Here are a couple of highlights from the book that illustrate this:

Page 106
April 18, 1933 -In spite of much reading on the subject I am still confused by the inflation theories.  Briefly the following inflation theories are now being pressed in Congress:

• Loans to industry by the Government
• Federal Reserve Bank to buy bonds and thus put money into banks.
• Put the money directly into hands of consumers by huge public works plans. 

Page 139
November 18, 1933 - It is also interesting to note that the effort to create credit by having the Federal Reserve Bank buy U.S. bonds in the open market has failed. Huge reservoirs of credit are available but banks won't make loans because business is too uncertain.  It seems to prove that when business starts moving credit will expand automatically but the artificial creation of credit will not expand business."

My Note: This can't be more true.  Rates have been driven to historical lows and yet, businesses and consumers are still not borrowing. Like 1933 the powers that be thought that borrowing would pick up - there by stimulating the economy - if the rates were driven down. However, borrowing is not picking up because of uncertainty and lack of hope in receiving a decent return on their investment.  Additionally, although the government has turned on the money faucet full blast for the banks, stricter lending criteria has inhibited them from making loans.  The party is over and everyone has a hang over. A friend at my work said, "I feel like the guy that has to sweep up after the elephants have left the circus."

Page 143
December 28, 1933 - Just finished reading a book entitled Our Mysterious Panics by Colman. Comes to conclusion that every panic is brought on by human greed and speculation instead of by complex economic cycles. Reasoning seems logical and as follows:

1. After a depression comes a slow return to normal.
2. A few years of "normal business," men get too optimistic and begin to over expand, speculate, etc.
3. Speculation leads to fraudulent stock issues, embezzlement, new theories such as "new era."
4. Then comes the crash or panic caused by over-expansion, fraud, embezzlement, and human greed.

My Note: Sound familiar?  Fraudulent "stock issues" of our time are "no-doc" mortgage loans.  Also, I think the government had a hand in inflating the real estate bubble.  Cheap money, loose lending standards, and greed on the parts of consumers and the banks, lit this powder keg.  Seems that everything fell right into place for the "Panic of 2008."

Page 152
January 24, 1934 - The people have gotten used to looking to the government for help and the average man does no stop to consider where the money is coming from or how it is to be paid back.

Page 156
March 22, 1934 - Radical socialism seems rampant in every class of society but mostly ministers and college professors. This had spread to the working class.  They no longer ask for favors but "demand" government work, cancellation of mortgages, reduction of debts, etc. They feel the courts will not permit foreclosure of mortgages or ejectments, etc.

My Note: Even today most professors are socialist. I remember back in 1993 most of mine were of this mind set.  That's not just speculation on my part. They came right out and said it.  I remember one paper I submitted that dealt with Supply-side Economics. The professor went after it and questioned this school of thought.  In that same paper I discussed the "The New Deal" and he had nothing to say about the negatives of Keynesian Economics.  That's alright, we all have our leanings.  I just wonder why professors and the "intellectual elite" are usually liberal.  It comes to mind that Roosevelt surrounded himself with these types and I believe President Obama did the same. 

If we want to know what stimulates business, maybe we should look to the ones that need stimulated and ask them.

Here is a link to this book on Amazon:
http://www.amazon.com/Great-Depression-Diary-Benjamin-Roth/dp/1586489011/ref=sr_1_1?ie=UTF8&qid=1295728230&sr=8-1